


/; 




Gopyiiglit}j°. 



COPVRIGHT DEPOSn^ 



Farm Accounting and 
Business Methods 



A TEXT-BOOK FOR STUDENTS IN AGRI- 
CULTURE AND A MANUAL 
FOR HOME-STUDY 



BY 
J. A. BEXELL, A.M. 

DEAN SCHOOL OF COMMERCE 
OREGON AGRICULTURAL COLLEGE 



The Home Correspondence School 
Springfield, Mass., U. S. A- 

1911 



^ 



^-^ 



COPYRIGHT 1909 

By J. A. BEXELL 



Copyright 1911 
By the home CORRESPONDENCE SCHOOL 



Ruled Blank Books 

with printed headings for use in writing out the exercises, or for practical 
use on the farm, may be obtained from stationers generally or from The 
Home Correspondence School, Springfield, Mass. 



©C(.A:^s^,o2o 



TABLE OF CONTENTS 



Page 

Chapter I. Introductory 7 

PART I. Financial Accounts. 

Chapter II. First Method— Single Entry : 13 

Chapter III. Second iMethod— Modified Double Entry 37 

Chapter IV. Household Accounts 56 

Chapter V. Third Method— Full Double Entry 70 

PART II. Cost Accounts and Special Records. 

Chapter VI. Cost of Production 91 

Chapter VII. Special Cost Records 98 

PART III. Business Organizations, Correspondence, and Forms. 

Chapter VIII. Business Organizations 115 

Chapter IX. The Business Letter 123 

Chapter X. Business Forms 141 

PART IV. Useful Tables 149 

Index ■ 160 



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in 2010 with funding from 
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PREFACE TO THE FIRST EDITION 

There are a number of works on Farm Accounts now on 
the market, but I have found none adapted to the class room. 
An arithmetic would be useless as a text without problems for 
solution; a text on Farm Records is likewise useless in the 
class room without exercises for practice. 

My aim has been to make the exercises as practical and 
simple as possible, but no attempt has been made to limit the 
illustrations to actual experience on any particular farm. 
Hence, both prices and results will probably vary considerably 
from actual practice, a fact which will not reduce their illus- 
trative value. The forms suggested contain many new and 
labor-saving features, conforming with the best modern busi- 
ness practice. A resourceful teacher will be able to supple- 
ment the exercises to any extent to suit the time available 
and the needs of his class. 

The increasing interest shown in this subject warrants the 
belief that it will be introduced into the public schools in the 
near future, and surely there is no subject more worthy of 
attention or more sadly neglected. Suggestions and criticisms 
from farmers and teachers interested in the subject will re- 
ceive careful consideration in a future edition. 

J. A. Bexell. 

Oregon Agricultural College 
October 1, 1909 



PREFACE TO THE SECOND EDITION 

A large number of inquiries from schools of all grades have 
confirmed my conviction that there is a growing demand for 
a text-book in Farm Accounts. Such a text-book must be 
teachable. Without a well graded set of exercises to place 
before the student it would be as useless in the class room as 
an arithmetic without problems. Many new exercises have 
been suggested by readers of the first edition and it is believed 
that the present volume offers a fairly satisfactory course. 
Ruled and printed forms have been provided for the exercises 
in bookkeeping and these forms are also suitable for actual 
bookkeeping on the farm. Chapters have been added on 
Business Forms, Business Correspondence, and Business Or- 
ganizations — subjects of the utmost importance to every 
student; and it is hoped that the added chapters will make 
the book more valuable as a business manual. 

The fundamental principles of accounting being the same 
in every business, it has been found that the exercises are 
equally adapted to classes in Mechanic Arts, Domestic Econ- 
omy, etc., so that the special exercises for this class of students 
have been omitted. 

A syllabus of instruction sheets has been prepared for stu- 
dents who desire to pursue the study at home, which is also 
available to schools giving correspondence courses. 

I take this opportunity of thanking all who have contributed 
in any way toward the improvement of this effort to help the 
farmer. Special acknowledgment is due Mr. E. B. Moore 
for his excellent chapter on "The Business Letter." 

J. A. Bexell. 

Oreg-on Agricultural College 
October 1, 1910 



FARM ACCOUNTING AND BUSINESS METHODS 



CHAPTER I 

INTRODUCTORY 

It is a truism to say that the financial side of farming is 
of the utmost importance. But the fact remains that this side 
of the world's greatest industry is almost entirely neglected 
by both the farmer and the schools. Professor Bailey says on 
this subject: "In visiting practically every farm in one of 
the counties of the state (N. Y.) we did not find one man who 
knew how much it cost him to produce milk or to raise any 
of his crops." 

Prosperity of the Farmer 

The Secretary of Agriculture, in recent Year Books, points 
out the remarkable prosperity of the farmer; that the export 
of farm products is vastly in excess of all other exports com- 
bined; that a million agricultural debtors have been trans- 
formed during the last ten years into the same number of 
surplus depositors; that "contrary to his reputation, the 
farmer is a great organizer, and he has achieved remarkable 
and enormous successes in many lines of economic co-operation 
in which the people of other occupations have either made 
no beginning at all or have nearly, if not completely, failed." 
He points out that most farmers live better than the average 
merchant or mechanic. 

Causes of Success 

It is doubtless true that the farmer is becoming a factor 
to be reckoned with in the business world; that the average 
farmer knows vastly more about scientific farming than his 
father did; he understands more thoroughly the value of 
proper cultivation, of fertilization, of rotation of crops, and 
of diversified farming; but it cannot be said that he owes 

(7) 



8 FARM ACCOUNTING 

his success to improved business methods. He has been suc- 
cessful, rather in spite of his ignorance in this respect, and 
because of the lavish generosity of mother nature. 

T-w^o Phases of Farming 

The business of farming assumes two distinct phases: the 
productive phase and the exchange phase. The one aims to 
extract the treasures from the soil; the other, to place them 
in the hands of the consumer. It is important not only to raise 
abundant crops, but also to sell the products to advantage. 

Importance of the Exchange Phase 

The importance of the exchange phase is often lost sight of. 
A farm may be forced to yield to its maximum capacity, labor 
may be managed properly and waste reduced to a minimum; 
and yet the net result may be a loss at the end of the year. 
As a general economic proposition, it might be said that large 
crops often result in serious loss to society as a whole. If the 
net value to the consumer is less than the labor and capital 
expended on the crop, society is the loser by the difference. 
Hence the importance of a thorough understanding by the 
farmer, as well as by the merchant and manufacturer, of the 
laws and methods of exchange or commerce. 

Farming a Paying Business 

That farming is a science has been emphasized so much that 
the fact that it is also a business is often lost sight of. It is 
a real business, and one which pays the United States close to 
eight billion dollars annually. It has been demonstrated re- 
peatedly that no legitimate business pays better than farming. 
It may be a little more uphill work at the start, since most 
farmers begin business with small capital, but it is incompar- 
ably safer in the long run, and will insure a competence for old 
age with greater certainty than any other occupation. But let 
it ever be borne in mind that the condition for success i« that 
farming must be conducted on business principles. 

Importance of Keeping Accounts 

Accurate records and accounts are absolutely necessary in 
the management of every business enterprise, great or small. 



INTRODUCTORY 9 

No business can be successful in the long run unless its con- 
dition can be determined at any time, and no conservative 
business man will fail to prepare a financial statement at the 
end of his fiscal year. He must determine how he stands, not 
only with others, but with himself. 

One object of keeping accounts is to assist in accumulating 
property. Another important object is to record a continuous 
history of business transactions for future guidance. Not 
only is this profitable, but it is a source of real pleasure and 
satisfaction to know our standing with those with whom we 
deal as well as the profits and losses in our business enter- 
prises. 

What the Records Should Shovi^ 

A complete system of farm records should enable the farmer 
to tell at any time how his business stands with himself and 
others; the cost of production of staple crops and live stock, 
and the periodical results of both the productive and the ex- 
change phase of his operations. The records should also show 
personal and household expenses, and finally a comprehensive 
history of the various phases of the enterprise, including plots 
of crop rotation, fertilizing, etc. 

Difficulties of Farm Bookkeeping 

Numerous systems of farm bookkeeping have been proposed, 
but the trouble with them all is that they are either too com- 
plicated or altogether unpractical. Professor Bailey says: 
"The entire subject of farm accounting must be attacked in 
a new way. The ordinary bookkeeping will not apply." The 
reason is obvious. Farming is a much more complicated busi- 
ness than most people suppose. A farmer is both a producer 
and a dealer. He needs financial records as complete as those 
of the average merchant and cost records as accurate as 
the manufacturer's. But the records must be adapted to 
the business in hand. The farmer is usually a very busy 
man. His chief difficulty is neither ignorance nor indolence. 
He has little time for fancy bookkeeping and still less for "red 
tape." What he wants is a plain, simple, straightforward 
history of his business, so arranged and classified as to 
require the minimum effort to keep it up. It may be inter- 



10 



FARM ACCOUNTING 



esting- for his children to learn the conventional use of red ink, 
ruling's, closing of books, the intricacies of journalizing, etc., 
but all this is not necessary to a proper understanding of farm 
bookkeeping. 

Methods of Bookkeeping 

In the following pages I suggest three methods of farm 
bookkeeping whereby the yearly profit or loss may be 
determined and compared from year to year. The first is ex- 
tremely simple Single Entry; the second method is a com- 
prehensive, but very simple. Modified Double Entry, by which 
the financial standing, the cost of production, profits and 
losses, etc., can be ascertained at any time; the third is a 
system of complete Double Entry, generally used in enter- 
prises doing an extensive credit business. Any farmer with 
average intelligence will be able to master either method with 
small expenditure of time and labor. 





PART I 

FINANCIAL ACCOUNTS 



First Method 

Being the simplest form of single entry, employing only one 
book, which may be purchased anywhere. (See page 10.) 



FINANCIAL ACCOUNTS 



CHAPTER II 

SINGLE ENTRY, THE SINGLE-BOOK SYSTEM 

The Day Book 

The most important record in this method of bookkeeping 
is the Day Book, or what might properly be called the History 
of the Farm. This should be written in the form of a diary, 
without attempting a close classification of the entries. Al- 
ways bear in mind, however, that it is safer to give too much 
rather than too little information in the records. The Day 
Book should contain any memoranda which might prove valu- 
able for future reference. Conditions of the weather, time of 
planting, breeding, division of fields, sales, purchases, loans, 
attendance at conventions, valuable recipes, etc., are proper 
subjects for entry. Though it is advisable to keep the book as 
neat as possible, it is unnecessary to spend much time for that 
purpose. It is more convenient to jot down items in lead pen- 
cil as they come along, and then, as time allows, classify them 
under their respective heads. 

The Day Book and Gash Book Combined 

In the form on page 19, the Day Book and Cash Book are 
combined. The ruling is that of an ordinary stock Day Book. 
In the left-hand column are entered all sums received and in the 
right-hand column all payments. 

While the combined Day Book and Cash Book has the advan- 
tage of extreme simplicity, it is often more satisfactory to 
devote a part of the Day Book, or a separate book, exclusively 
to cash transactions. Where this plan is followed, it is un- 
necessary to record all the cash items in the Day Book. The 
left-hand page is used for cash receipts and the opposite page 
for payments. 

(13) 



14 FARM ACCOUNTING 

Bill and Receipt File 

A very important part of the farm records is the Bill and 
Receipt File. A part of the Day Book can be devoted to that 
purpose, but it is better to provide a separate book. In it 
should be securely pasted all bills for machinery, implements, 
tools, live stock, nursery stock, furniture, etc., which will be 
subject to inventory, but not bills for supplies, feed, table ex- 
penses, etc. ; also receipts for the payment of money, canceled 
notes, certificates of pedigree, important clippings from peri- 
odicals, and any other matter of interest. This will prove an 
invaluable record for future guidance. (See illustration, page 
24.) Many prefer the Pocket File, illustrated on page 16. 

The Inventory 

The inventory may be considered the foundation of the farm 
records, because without it no results at all can be obtained. 
It should be taken at such a time as will give the most accurate 
results with the least expenditure of labor. This differs 
widely in different localities. January 1st seems the most 
natural beginning of the fiscal year, but the objection is that 
at this time there is apt to be a large quantity of feed and 
supplies on hand. April 1st would be a better date so far as 
the stock on hand is concerned, but inconvenient in many 
localities on account of the pressure of spring work. When- 
ever it is taken, it should be accurate. No guesswork should 
be tolerated. Weigh and count ; do not estimate. Then assign 
the actual market value to the property, taking due account 
of depreciation. 

Depreciation 

Neither an old wagon nor an old horse is worth as much as 
new ones. The same holds true with very few exceptions of 
all equipment, animals, houses, and improvements. The ques- 
tion as to what rate shall be charged off annually, so as to 
create a sinking fund with which to renew the depletion, has 
been an open question with accountants since time immemorial. 
It is particularly difficult to determine the depreciation of 
live stock, work horses, and depletion of the fertility of the 
soil. Without entering into a discussion of the subject, I 



SINGLE ENTRY 15 

give below the experience and opinion of the best authorities 
on the subject. The thoughtful farmer will find no difficulty 
in adjusting these rates to suit his conditions. For the pur- 
pose of general estimates, the following rates on the cost or 
market value are fairly accurate: — 

Buildings (including insurance and repairs) .... 5 per cent. 

Horses, above 5 years . 10 per cent. 

Milch cows (after 3d year) 8 per cent. 

Machinery and tools 10 per cent. 

HoM^ to Determine the Profits 

The all-important question at the end of each year is : Has 
the work for the year been a financial success or failure ? To 
determine the profits or losses is, therefore, a problem to be 
solved each year. As a matter of fact, it is a very simple 
problem, and it becomes easier the oftener it is done. 

Let us assume that heretofore you have kept no books what- 
ever, but you have now decided to make a start. You have 
procured a simple, substantial Day Book (may be purchased at 
any stationery or drug store) and, after listing all your prop- 
erty, you are prepared to make the entries shown in the 
illustration. April 1st is selected as the beginning of the 
fiscal year, because on that date the supplies, grain, feed, etc., 
are usually low, and the average farmer has considerable time 
to spare. Of course, this varies in different localities, and any 
other date may be adopted to suit the farmer's convenience. 
The proper opening entries, including the inventory, are 
shown on page 18. 

A Year Later 

At the end of the year we are ready to determine the result 
of the year's work. If we have kept only memoranda in the 
Day Book, the best we can do is to take another inventory 
exactly similar to the last one. It is evident that the differ- 
ence between what we are worth now and our net worth last 
year will be the net gain. The second financial statement and 
the statement of Profit and Loss are illustrated on page 20. 



16 



FARM ACCOUNTING 



Net Earuin^s 

The net profit shown in the illustration, page 20, includes 
the interest on the investment and the wages of the members 
of the family. To find the net earnings of the proprietor, the 
value of the household goods, life insurance, cash, and the 
cost of the dwelling should be deducted from the last year's 
inventory. Then find the interest on the remainder at a fair 
rate; this deducted from the profit gives the earnings of the 
family. It can be apportioned in any way the proprietor sees 
fit. This is illustrated further in Lesson 11. If members of 
the family, engaged in productive work, receive regular pay 
before the statement is made, the final result is the net profit 
above wages and interest. The question might be asked : why 
deduct the value of the dwelling before the interest is taken? 
The reason is that the dwelling is not a productive investment. 
It is apt to be more or less valuable than the average standard, 
according to the taste and ability of the owner. Amounts 
drawn for personal use should, of course, be added to the net 
earnings. 




ALPHABETICAL BILL FILE 



SINGLE ENTRY 



17 



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18 



FARM ACCOUNTING 



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OPENING ENTRY AND INVENTORY 



SINGLE ENTRY 



19 



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20 



FARM ACCOUNTING 



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SECOND FINANCIAL STATEMENT 



SINGLE ENTRY 21 

Personal Accounts 

A farmer frequently retails his products to his neighbors or 
to townspeople, if he lives near town. In such cases it often 
happens that he can sell to better advantage by running an 
account with steady customers, collecting by the week or 
month. If this phase of the business is extensive, as is the 
case in truck farming, dairy, poultry, and the like, it would 
pay the farmer to provide tickets or coupons and sell five or ten 
dollars' worth in advance even at a small discount. But gen- 
erally an account with each customer, kept either in a separate 
book or in part of the Day Book, will be found satisfactory. 
However, most farmers sell their products for cash, or ex- 
change for merchandise, which is equivalent to cash sales. 
It is, therefore, unnecessary to enter into an elaborate dis- 
cussion of keeping such accounts. 

Some farmers, very unwisely, attend to the personal busi- 
ness of their hired help, even to the extent of buying their 
smoking tobacco. There is absolutely no excuse for such a 
practice. Rather pay your help in installments and let them 
settle their own bills. 

Accounts with persons we owe are generally unnecessary. 
Most merchants furnish either a pass book in which the ac- 
count is shown in detail, or an itemized bill is furnished with 
each purchase. These bills should be pasted or filed in the 
Bill File and checked off when paid. In the great majority of 
cases this will prove more satisfactory than ledger accounts. 

A special ledger can be provided, or separate pages of the 
Day Book devoted to special accounts. This classification is 
made either daily, weekly, or monthly, as time and circum- 
stances allow. 



22 



FARM ACCOUNTING 






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SINGLE ENTRY 



23 



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PERSONAL ACCOUNTS 



24 



FARM ACCOUNTING 




L SAFE PLACE TO TRAk>B 




.J8e4_ 

CORVALLIS ORE^iQH 



SOLD TO I'^artin Harris, Blodgett, Oregon. 



Saturday, 
Oct. Srd, 
1908. 



CorvallU, Oregon,. 



_Aprl l 3. 1906 



M lartln Harris 



Harvrsting Machineiy. 

Guns & AmiDimibon 

All Kmd. ol Toolfc 

FIno Cullcry. 



To It H. HUSTON, Dr. 
SHELF AMD HEAVY HABDWABE 

AgDCuitaal Iny'-r"*-, Wt«au. Cumgn, Etc 
STOVES & TIMWARE. PbunUng • Speciehy. 



Buggies, 
PftiotB ud Oik 
Tinware, 
Gmiitcwaie. 
Pumps, Pipe, 
Rope. Etc 



Cash 



Diamond Hay Carrier" 
IbB. Manilla Hoy Hop* f" 
Hay Pnlloys 
Hay Fork 



tif Tb. 



CorvcUlis, Oregon, 



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^y 190 f 



' In account with 



a ]. BLACKLEDGE 

GENERAL HOUSE FUItNISHER . ^ 

CAItPKTS. UNOLEOM AND MATTLNO 



M 



tY 






J.d. CO 
ir.oo 

39.60 



BILL AND RECEIPT FILE 

See also p. 16 



SINGLE ENTRY 25 

Continued Inventory 

The illustration on page 17 shows a very convenient form 
of a continued inventory. The items are written only once 
in as many years as there are money columns. Besides sav- 
ing space and labor, it avoids the possibility of omitting im- 
portant items, if the first list of items is correct. The prices 
will also be more accurate, since they may be easily compared 
from year to year. Two or three blank lines should be left 
under each heading for new items which may appear in the 
next inventory. The ordinary trial balance book, for sale at 
any stationery store, is a good form, or additional columns 
may be ruled in the Day Book or Journal. 

Banking 

The enormous increase in bank deposits in rural communi- 
ties is the best evidence that the farmer is beginning to 
appreciate the value of better system in his finances. It is 
claimed that fully ninety-five per cent, of the country's busi- 
ness is done by credit currency, such as checks, drafts, 
money orders, notes, and the like. Many good business men 
keep only their bank book, and this is far more satisfactory 
than no bookkeeping at all, especially if bills and receipts are 
filed for reference. The bank account may be carried entirely 
independent of all other records. 

Banking carries with it many advantages. Important 
among them are : — 

1. The depositor's credit and influence are measured 
largely by the size and regularity of his bank account. 

2. A tendency to economize by a desire to increase the 
bank balance. 

3. The banker becomes your bookkeeper and business 
counselor. 

4. Security against fire and robbers. 

5. Indorsed checks are both records and receipts of pay- 
ments. 

6. A benefit to the community by keeping the money in 
circulation. 

7. Convenience in making change. 



26 



FARM ACCOUNTING 




BANK ACCOUNT 



SINGLE ENTRY 27 

8. The bank will always loan to a good depositor in pref- 
erence to one who is not a depositor. 

There are only two operations in banking which need dis- 
cussion here — depositing and checking. The banker will give 
all necessary directions regarding both, except as to keeping 
the individual account. This is illustrated on page 26, and 
will be thoroughly understood after Lesson 5 has been 
worked out. The special column Cash Book, pages 44 and 45, 
is an excellent form for keeping the bank account. If all 
cash is deposited and all payments made by check, the dif- 
ference between the total columns represents the bank bal- 
ance. As to deposits, it is preferable to deposit all cash, and 
then draw out for personal use as needed. 

The method of handling checks is as follows: Record the 
payee, number, and amount, as illustrated under Cash Re- 
ceipts, page 44. The checks are satisfactory receipts, but the 
itemized bills should be pasted in the Bill File and bear the 
same number as the checks. The bank will usually furnish 
all necessary stationery free of charge. The bank balance is 
considered a part of the cash on hand, so that no special 
account except the check stubs and pass book need be kept 
with the bank. The bank balance is proved each month as 
follows : Arrange the checks returned numerically. List the 
checks not returned; add the outstanding checks to the bal- 
ance shown in the check register; the sum should agree with 
the balance in the pass book. It is often convenient to keep 
a special check register. Following is a convenient form, 
showing the method of proving the balance at the bottom of 
the page. 



28 FARM ACCOUNTING 



A WORD TO THE READER 



The real aim of this book is to improve the business methods 
on the farm which the reader owns now or expects to own in 
the future. Merely reading the book will, doubtless, create a 
vague conviction that the subject is important, but it adds but 
little to the reader's knowledge of accounting and correct busi- 
ness method. This is accomplished only by working out 
problems typical of the actual experience of the average 
farmer. In the process of such exercises the conviction will 
become strong that the business phase is of such importance 
that no farmer who aspires to success can afford to neglect 
it. It is suggested that a systematic study of the Illustrative 
Lessons be taken up in each family, especially where there 
are boys and girls advanced far enough to profit by the study, 
and that actual accounts of the home be started wherever it is 
practicable. For instance, it will be found exceedingly inter- 
esting for the boys to take an actual inventory of the home- 
stead after having worked out Lesson 1, and the girls will find 
Lessons 12 and 13 especially helpful and interesting. It will 
be found that each lesson will contain suggestions which will 
prove valuable to every reader, whether he is engaged in farm- 
ing or in any other occupation. 

It is an excellent practice for farmers to come together 
occasionally to exchange views on any subject pertaining to 
their common interests. Why not organize a Farmers' Com- 
mercial Club and enjoy good fellowship as well as the benefit 
of each other's experience? One important number of the 
permanent program could be a discussion of business methods. 
A leader should be appointed to conduct a regular class for 
several weeks. An outline for such a course is found on page 
161. The publishers will be glad to furnish the necessary 
material for working out the exercises or for practical use on the 
farm. 



SINGLE ENTRY 29 

Illustrative Lessons 

LESSON 1 
THE INVENTORY 

I. General Instructions. 

In preparing these lessons, the student should use great 
care as to neatness and form. It is not necessary to use the 
printed forms provided for the purpose, but better work will 
be done with good stationery. All the work should be done 
with ink, if practicable. Do not pass by anything that is not 
clearly understood. Ask questions. The amounts given are 
totals in all the lessons, unless the word "at" precedes the 
price. Hand in each lesson when completed for approval. 

II. Written Wo7'k. 

1. Use three-column Journal paper found in your account 
book. This lesson is illustrated on page 18. 

2. Write at the top of page 1 of your Day Book: Mon- 
day, April 1, 1908. Then copy the following opening state- 
ment. All work must be done neatly in ink. 

Opening Statement 

Six years ago to-day I purchased my present farm, investing 
cash, $6,000. Below is an accurate inventory of all my prop- 
erty, and a statement of my affairs as they stand to-day. 

3. Skip one line, then arrange the following statement of 
Resources and Liabilities exactly as illustrated on page 18. 

Inventory, April 1, 1908 

Resources : Farm, 160 A., market value, $8,000. Produce : 
200 bu. Corn @ 50c. ; 150 bu. Oats @ 45c. ; 200 bu. Wheat @ 
85c. ; 20 tons Hay @ $6.00 ; Potatoes and Vegetables, $50.00. 
Stock: 6 Horses, average $100.00; 20 Cows, average $40.00; 
11 Steers, average $12.00; 5 Heifers, average $11.00; 12 Hogs, 
average $6.00; 100 Sheep, average $3.00. Poultry: 150 
Chickens @ 45c. ; 21 Turkeys @ 75c. Implements : 1 Binder, 
$125.00; 2 Plows @ $10.00; 2 Harrows @ $12.50; 1 Mower, 
$40.00 ; 1 Hay Rake, $15.00 ; 1 Grain Drill, $50.00 ; 2 Wagons, 
together, $110.00; 2 Sets Harness, together, $90.00; 1 Buggy, 
$100.00; Tools, $50.00. Supplies, $25.00. Household Goods, 



30 FARM ACCOUNTING 

$350.00. Life Insurance (paid-up value), $964.36. Cash, 
$170.00. 

Liabilities: Labor (unpaid), $75.00. Accounts Payable, 
$125.15. Mortgage, favor Iowa Trust Co., $3,000.00. 

Your work, if correct, will be exactly as shown on page 18, 
except that you will fill in the omitted part of the illustration. 



LESSON 2 
DAY BOOK AND CASH BOOK 

I. General Instructions. 

Use three-column Journal paper. This lesson is illustrated 
on page 19. The Day Book should contain a complete history 
of the business. Here the cash account is carried in the two 
money columns. It is often convenient to carry this account 
on special pages. 

II. Written Work. 

Copy the following entries in the Day Book on the next page 
after the last statement. Head the pages and columns the 
same as in the illustration. 

(1) Heavy rain storm. Shod ''Cap" and "Maud" at Scow- 

scroft's ; paid $3.00. Bought 2 tons of Coal @ $4.00 
per ton. 

(2) [Skip a line between each date.] Attended Breeders' 

Convention at Portland. Program and report on 
file. Paid expenses, $8.40. 

(3) Paid Grocery bill at Murdock's, $11.40. 

(4) Bought Milch Cow of J. C. Smith; paid cash, $40.00. 

Attended concert of the Boston Jubilee Singers, 
with family; paid expenses, $2.00. 

(5) Sold one Calf to P. A. Anderson for cash, $7.00. 

Bought 1 pr. Gloves, $1.50. 

(6) Bought at La Fount's for cash : 1 Ax, $1.00; 1 Ham- 

mer, 45c.; Nails, 50c. Went to Portland to select 
farm implements ; expense, $3.00. 

(7) Attended church with family. Dr. E. Hamilton 

preached on "Civic Honor." Collection, 25c. 



SINGLE ENTRY 31 

(9) Bought Shoes for Teddie, $2.00. ■ 

(10) Bought 5 bu. Tested Seed Corn @ $2,00 per bu. 

(11) Rain all day. Fannie dropped calf. 

(12) Sold 3-year-old Horse, "Cap," for $125.00. 

(13) Bought one Studebaker Top Buggy; price, $135.00; 

discount, $15.00; net amount paid, $120.00. 

(14) Attended church with family. Our pastor preached 

on the "Prodigal Son." Collection, 25c. Paid 
quarterly dues, $10.00. 

(15) Mother took sick suddenly. Dr. Brown considers her 

case very serious. 

(16) Hired Frank Johnson for six months @ $30.00 per 

month and board. Mother is better. 
(17 to 28) [Student will insert at least one imaginary entry 
for each date. Try to use good judgment as to what 
might happen and what might be purchased and 
sold during the remainder of the month. Be care- 
ful not to pay more money than you have received.] 

(29) Paid the following bills: Skinner Bros., Dry Goods, 

$14.50; Murdock's, Groceries, as per bill on file, 
$15.60. Sold Murdock's 20 doz. Eggs @ 20c.; 12 
Dressed Spring Chickens @ 30c. 

(30) Received Cream check. See Statement on file, $45.30. 

You will now balance the cash. Add the two col- 
umns; find the difference and enter it on a new 
page, as shown on page 19. 

LESSON 3 
PERSONAL ACCOUNTS 

I. General Instructions. 

Use three-column Journal paper. This lesson is illustrated 
on pages 22 and 23. Read carefully page 21. 

II. Written Work. 

Prepare two sets of accounts, one entitled "Others Owe Us" 
and the other "We Owe Others." 

(a) "Others Owe Us." 

1. Mrs. Richard King, a neighbor, has been buying 
dairy and poultry products on account. Her ' ac- 



32 FARM ACCOUNTING 

count is illustrated on page 22. Prepare her 
account with the following entries : — 

May 1. There was a balance due from April, 

$3.80 ; 1 lb. Butter, 20c. 
May 3. 2 doz. Eggs @ 15c. 
May 5. 1 Chicken, 30c. 
May 12. 2 lbs. Butter @ 20c. 
May 18. 2 qts. Strawberries @ 15c. 
May 25. 1 qt. Cream, 20c. 
May 31, 1 lb. Butter, 20c.; paid cash, $5.00. 

[Balance the account as illustrated.] 

2. In a similar manner prepare an account with the 

Adams Mercantile Co., with whom we are trading 
and who are buying produce from us. The entries 
are as follows : — 

June 4. 5 bu. Potatoes @ 75c. 
June 8. 60 bunches Onions @ 40c. per doz.; 
10 doz. Sweet Corn @ 20c. On the same date 
we bought goods as per their bill on file, $6.50. 
June 15. 8 crates of Strawberries @ $1.75; 20 
doz. Eggs @ 15c. On the same date we bought 
a Suit for William for $13.00. [Prepare this 
account; rule and balance the same as Mrs. 
King's account. The balance due is $5.25.] 

3. In a similar manner prepare three additional original 

accounts of not less than ten entries to each. 

(6) "We Oive Others." 

1, Frank Johnson, one of the farm hands, has requested 
that his wages be left on account, and that he be 
allowed to draw as he needs from time to time. The 
following items enter into his account. [Prepare it 
exactly the same as the five preceding accounts.] 
April 30. Wages for April, $30.00. 
May 1. Cash, $10.00. 
May 5. Bought Clothing for him at Goddard's, 

$7.20. 
May 10. Cash, $5.00. 
May 20. Cash, $3.00. 



SINGLE ENTRY 33 

May 31. Credit Wages for May, $30.00. [Rule 
and balance as heretofore.] 
2. July 1. Bought a 3-year-old Horse, "Jim," for 
$150.00, on condition that it was to be paid for at 
the rate of $25.00 per month. Four payments have 
been made on the first of each month, beginning 
August 1st. [Write up the account. Rule and 
balance as heretofore.] 

LESSON 4 
STATEMENT No. 2 

I. Genei'oL Instructions. 

We have now arrived at the end of the year and we are 
ready to prepare the second financial statement. Use three- 
column Journal paper. This lesson is illustrated on page 20. 
Read carefully pages 15 and 16. 

II. Written Work. 

Step 1. Take inventories of all your property, listing and 
placing a fair valuation on it, same as in Lesson 1. 

Step 2. Go through your personal accounts, balance them 
as illustrated in Lesson 3, and extend the amounts under the 
various headings in the inventory — Grain, Stock, etc. 

Step 3. If you own any notes, stock, or other valuables, 
list them under Bills Receivable. Be sure not to omit any- 
thing you own or owe. 

The above directions merely indicate how an inventory is 
taken. The following inventories are assumed and you will 
prepare a statement exactly as heretofore. Compare the 
values and find totals. See page 20. 

Inventory, April 1, 1909 

Resources: Farm, $8,620.00. Produce: 150 bu. Corn @ 
55c.; 175 bu. Oats @ 43c.; 253 bu. Wheat @ 87c.; 20 tons 
Hay @ $6.50; Potatoes and Vegetables, $40.00. Stock: 6 
Horses @ $100.00; 1 3-year-old Horse, "Jim," $150.00; 22 
Cows @ $42.00; 14 Steers @ $13.00; 4 Heifers @ $11.00; 
11 Hogs @ $6.00. Poultry: 165 Chickens @ 45c.; 25 Tur- 
keys @ 75c.; 10 Geese @ 70c. Implements: 1 Binder, 



34 FARM ACCOUNTING 

$120.00; 2 Plows @ $9.00; 2 Harrows @ $11.50; 1 Mower, 
$40.00; 1 Hay Rake, $13.00; 1 Grain Drill, $45.00; 2 Wagons, 
$40.00 and $60.00; 1 new Wagon, $100.00; 2 Sets Harness, 
$25.00 and $65.00; 1 Surrey, $130.00; 1 Light Buggy, $50.00; 
Tools, $50.00. Supplies, $30.00. Household Goods, $350.00; 
Piano, $300.00. Life Insurance, $1,073.40. Cash and Bank, 
$126.04. 

Liabilities: Labor (unpaid), $85.00. Accounts Payable, 
$142.32. Mortgage, favor Iowa Trust Co., $3,000.00. Note, 
favor Western Lumber Co., $200.00. Due on Piano to Smith 
Bros., $200.00. 

Having completed the statement of Resources and Liabili- 
ties, you will now determine the profit for the year. Skip one 
line and write the following statement, inserting the net worth 
in Statement No. 1 and what you find above. 

statement of Profits and Losses 

Net worth now $ 

Net worth last year (Statement No. 1) $ 

Net profit (or loss) $ 

Your result will agree with the illustration on page 20, if 
correct. Dividing the gain with last year's net worth, we find 
that you have made a gain of about nine per cent, on your 
investment and labor. 

LESSON 5 
THE BANK ACCOUNT 

I. General Instructions. 

Study the remarks on banking on page 25. You are sup- 
posed to have opened an account with the Citizens' National 
Bank and to have performed the transactions given below. 
The bank has given you a pass book in which the teller will 
enter the deposits as they are made, and the checks, when 
they are returned once a month. You have kept a private 
account with which you check monthly. 

II. Written Work. 

1. Enter the following on a sheet of Journal paper, as 



SINGLE ENTRY 35 

illustrated on page 26. Extend the balance after Nos. 351, 
354, 358, 368, and 371. 

Deposits: April 1, $98.35; (3), $70.00; (6), $90.00; (9), 
$40.50; (13), $125.00. The checks drawn, beginning with 
No. 350, are as follows : April 1, Mrs. Martin Harris, $30.00 ; 
Odell Seed Co., $10.00. (3), Emma Johnson, $1.50; Brown 
& Pickett, $3.00. (5), Salem Implement Co., $20.00; E. 
Skidmore, $65.00; Empire Lumber Co., $3.75. (6), County 
Recorder, $3.00. (8), Earle & Crockett, $80.00; Farmers' 
Supply Co., $15.40. (9), Frank Johnson, $10.00; Goddard 
Hardware Co., $3.50; Mrs. Martin Harris, $30.00; Crown 
Fertilizer Co., $6.40; 0. N. Smith, $15.80. (13), County 
Treasurer, $30.40; Kimball Livery Cp., $15.00; Brown & 
Pickett, $2.50. (20), C. J. Olson & Son, $15.00; Horning & 
Bacon, $10.00; Crawford Hardware Co., $10.50. (23), Brown 
& Pickett, $13.30. 

2. At the end of the month add the checks and deposits and 
find the difference. The resulting balance should be $29.80. 

3. The bank has returned your pass book with the canceled 
checks. You have arranged them numerically and find that 
all are returned except Nos. 361, 366, and 369. In other 
words, the bank has paid all except these checks. By adding 
the outstanding checks to your balance you find that the bank 
balance ought to be $58.30, which you find agrees with the 
pass book. The canceled checks should be filed numerically 
and kept for future reference. 



Second Method 

A system of modified double entry in which the special 
column Journal, or Cash Book, is the basis. It is the most 
satisfactory and labor-saving system in a cash business, where 
personal accounts are few and where accurate results are 
desired. The personal accounts are to be carried exactly as 
in the first method, if such accounts are kept at all. 



CHAPTER III 

MODIFIED DOUBLE ENTRY, THE SPECIAL COLUMN 

CASH BOOK 

Not many generations ago it was considered sufficient for 
the average manufacturer merely to record his cash receipts 
and expenditures and to keep a tolerably accurate check on the 
cash balance. In many instances the left trousers pocket 
served as the debit side and the right as the credit side of the 
"Ledger." Modern business methods and sharp competition 
have changed these notions until to-day it is necessary to know 
the cost of production in advance to the smallest detail. An- 
cient business methods prevail yet, very generally, on the farm. 
The wonderful progress of the American farmer is due to 
marvelous natural resources, labor-saving inventions, and 
natural ingenuity, rather than to wise and prudent manage- 
ment. 

Necessity of Careful Accounting 

In certain respects, a farmer must combine the methods of 
the manufacturer and the merchant. He must learn, not only 
how to increase production, but also how to facilitate the prof- 
itable exchange of his products. He must reduce the cost of 
production to the minimum by increasing the quality and the 
quantity of his products, and by getting full value out of labor. 
He must manage so that his working force, farm hands, chil- 
dren, horses, all, are constantly employed. This requires most 
skillful management in the rotation of crops, in the division 
of labor, in selecting seeds, fertilizers, and stock; and, above 
all, it requires general prudence in purchasing equipment and 
supplies, and in marketing products. Progressive farmers 
require a variety of records to assist in the proper manage- 
ment of their business. A first-class set of books is just as 
indispensable to them as to the banker or to the manufacturer. 

Superiority of Double Entry 

A careful comparison of the results obtained in the last 
chapter with the balance sheet given on page 47 will convince 

(37) 



38 FARM ACCOUNTING 

the reader of the superiority of double entry. It will be ob- 
served that the only result obtained by a comparison of inven- 
tories was the net profit or loss. The source or causes of these 
results cannot be obtained by this method. The method sug- 
gested in Chapter II has this advantage: There is not a 
farmer so busy or so ignorant that he cannot adopt it and 
derive great benefit from its use. But the ambitious, progress- 
ive farmer will not be satisfied with this primitive method 
any more than a wide-awake merchant will be satisfied with 
single entry bookkeeping. He will adopt a system which will 
give him at any time reliable information as to his financial 
standing, cost of production of crops, live stock and poultry, 
household expenses, etc., and by which he can prove that his 
work is correct. 

Single and Double Entry Compared 

The distinction between single and double entry is unimpor- 
tant for our present purpose, but it may be a satisfaction to 
the student to know that the method we are now to consider 
is double entry. The important distinction between the two 
methods is that in double entry accounts are kept with per- 
sons, property, and allowances, while in single entry accounts 
are kept with persons only. In double entry there is a corre- 
sponding debit for every credit; the total debits and credits 
must therefore be equal, and must balance at any time. This 
becomes clear by referring to the Cash Book, page 44. In the 
first entry, the amount is entered in both the Total and in the 
Sundries column; and the same is true of all the succeeding 
entries. Hence the sum of columns four to ten inclusive must 
equal the total in column three. You will find the same to be 
true of the Payments, and of the Household Accounts. 

Additional Books Needed 

Very important books in double as well as in single entry 
are the Day Book and the Bill File. They are to be kept in 
exactly the same way as suggested under single entry, except 
that no cash entries are recorded in the Day Book. It is used 
only as a diary. The important consideration now is to adopt 
additional records that will furnish the necessary informa- 



MODIFIED DOUBLE ENTRY 39 

tion in systematic and tabular form requiring the minimum 
amount of labor. 

The Gash Book 

The Cash Book is the basis of classification. A very con- 
venient form is given on pages 44 and 45. The special col- 
umns take the place of a Ledger. All money columns except 
the total column will be referred to as distribution columns. 
They are in reality separate accounts, and this form might, 
therefore, properly be called a combined Ledger and Cash 
Book. The form suggested has the important advantage of 
being self -balancing. A trial balance can be taken at the end 
of each page, month, or year, as illustrated on page 57. The 
process of preparing a financial statement becomes extremely 
simple by this method. A few observations regarding equip- 
ment and supplies, improvement and repairs, will be of assist- 
ance in using the distribution columns. 

lEquIpment and Supplies 

In accurate accounting, the question often arises: What 
shall be considered equipment, and what supplies? Supplies 
are defined as expendable or consumable materials, which are 
incapable of being used more than once; while equipment is 
of more permanent character, articles which can be used 
repeatedly. Fuel, lubricating oil, cotton waste, feed, etc., are 
supplies; while machinery, furniture, and apparatus of all 
kinds are equipment. 

Improvements and Repairs 

The distinction between improvements and repairs is not 
always clearly understood. An improvement adds value to 
the property, in the shape of equipment, buildings, drains, 
fences, and the like, while repairs merely keep up the property. 
A coat of paint on an unpainted building is an improvement; 
repainting is classed under repairs. This distinction is very 
important in making an inventory. Improvements are added 
to the inventory, repairs are not. 



40 FARM ACCOUNTING 

Gash Balance and Sundry Columns 

The cash balance is found as follows : — 

Total receipts $653.14 

Total payments 578.80 

Balance $74.34 

Note that the totals of the distribution columns equal the 
total of column on both sides of the Cash Book. The Sundries 
column contains all entries which do not fall under the special 
columns. At the end of the year the items are segregated 
under various titles. The segregation for the month of April 
is as follows : — 

Sundry Receipts Column 

Balance $126.04 

Labor 10-00 

Wood . . • - • 22.40 

Total $158.44 

Sundry Payments Column 

Interest $22.00 

Taxes 33.40 

Accounts Payable • • • 15.80 

Insurance • • 35.10 

Total .$106.30 

Improvements and Repairs Column 

Improvements $80.00 

Repairs 34.60 

Total . . '. - .$114.60 

Trial Balance 

In the language of the accountant, a trial balance is a test of 
the equality of the debits and credits in a set of double entry 
books. Our trial balance is much simpler ; it is simply a test 
of equality of the total columns and the distribution columns. 
In the Cash Book, merely add the distribution columns on each 
side and note that their sum equals the respective total col- 



MODIFIED DOUBLE ENTRY 41 

umns. The Household accounts are balanced in the same 
manner. 

The Ledger 

With a special column Cash Book, the Ledger can be dis- 
pensed with in most cases. The further classification of the 
Sundry columns can be done at the end of the year, as illus- 
trated on page 46, and a few pages of the Day Book can be 
devoted to "What We Owe Others" and ''What Others Owe 
Us." Where a special Ledger is found necessary, the form 
shown on pages 77 or 82 can be used. 

The old-style Ledger possesses some advantages over any 
other form. The debit appears on the left and the credit on 
the right side on the same page. It is used either in double 
or single entry. The difficulty of keeping the Ledger in bal- 
ance prevents the use of the double entry Ledger to a very 
large extent. This is especially true if an attempt is made 
to use the ordinary Journal. 

Direct entries into either the double or single entry Ledger 
present less difficulties, and the method is recommended where 
the classification of accounts is such as to make the combined 
Cash Book and Ledger unpractical. This need scarcely ever 
be the case, however, because if ruled sheets cannot be ob- 
tained without headings, a blank sheet may be ruled with any 
number of columns and headed with titles to suit. For 
example, an orchardist would head his Receipt columns 
Apples, Prunes, Peaches, Small Fruits, etc.; while an exclu- 
sive stock farmer would devote special columns to the different 
kinds of stock. 

The advantage of the Ledger method is that each account is 
more condensed, while the self-proving and labor-saving fea- 
tures are important in the special column Cash Book. Pre- 
paring a trial balance and balance sheet, and closing the 
Ledger properly, though very simple for the experienced 
accountant, requires a proficiency in bookkeeping that few 
farmers possess. 

On page 77 is an illustration of the ordinary form of direct 
entry Ledger, showing the entries for April 1st. Compare 
these with the first entries on pages 44 and 45, and note the 
similarity of results. In the form follow the arrows and note 



42 FARM ACCOUNTING 

that there is a debit for every credit, and vice versa. In the 
column marked (a) is entered the Day Book page, if the 
entries have been previously made in that book. 

The Annual Statement 

The annual statement exhibits in a condensed form the 
financial operations for a given period. It shows the resources 
and liabilities, the cash receipts and expenditures, the profits 
and losses, the net profit or loss, and the net worth. It enables 
the proprietor to analyze his business with considerable ac- 
curacy and to trace the sources of profits and losses. There 
are various forms of statements, but the illustration on page 
47 seems best suited to the farming business. Statement 
No. 3 shows the results of a month's business only. The 
inventories are obtained from separate schedules and the cash 
receipts and expenditures are the totals found in the Cash 
Book. The profit and loss accounts are fully analyzed after 
Statement No. 4. 



MODIFIED DOUBLE ENTRY 43 

Illustrative Lessons 

LESSON 6 
CASH RECEIPTS, SET 1 

I. General Instructions. 

Use Forms 2 and 3. This exercise is illustrated on page 44. 
The result of your work will be exactly as illustrated on that 
page, if correct. Do not merely copy page 44, but compare 
your work with the illustration after you have done your best. 
Before beginning your written work read very carefully pages 
37 to 42. This should convince you that double entry is far 
superior to single entry. 

II. Written Work. 

1. Turn to Form 2 in your Cash Book and enter the 
following items in the proper columns : — 

April 1, Balance forwarded, $126.04 (Total and Sundry 

columns) ; 2 tons Clover @ $6.00; 80 bu. Corn @ 

65c. 
(3) 12 Cabbages @ 10c. ; 25 lbs. Butter @ 25c. 
(6) 2 Steers @ $40.00; 20 Spring Chickens @ 45c.; 

Hauling Coal, 1 day, $5.00. 
(9) Jersey Calf, $10.00; 2 cords Wood @ $4.00; 5 bu. 

Potatoes @ $1.00. 

(12) Heifer, $25.00; 10 lbs. Butter @ 28ic. 

(13) 75 bu. Corn @ 65c.; Work on County Road, $5.00; 

4 bu. Apples @ $1.50. 
(15) 20i doz. Eggs @ 20c.; 36 lbs. Butter @ 25c.; 2 tons 

Clover @ $6.00. 
(17) 100 Apple Trees @ 20c.; 1 Steer, $37.00; 12 Cedar 

Posts @ 20c. 

(19) 6 Spring Chickens @ 40c. ; 95 bu. Corn @ 60c. ; 3 tons 

Hay @ $6.00. 

(20) Jersey Calf, $10.00; 50 bu. Oats @ 35c. 
(23) 1 Turkey, $1.40; 1 bu. Clover Seed, $1.50. 
(26) 18 lbs. Cheese @ 15c. 

(29) 3 cords Wood @ $4.00; 10 bu. Barley @ 40c.; 4 tons 
Timothy @ $5.50. 



44 



FARM ACCOUNTING 







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CASH BOOK 



46 FARM ACCOUNTING 

(30) Produce for Household Use, Orchard, and Garden, 
$5.25; Dairy, $6.50; Poultry, $6.30. 

2. Add the columns. The correct results are as follows: 
Total, $653.14; Grain, $179.25; Hay, $65.50; Orchard and 
Garden, $37.45; Stock, $162.00; Dairy, $27.30; Poultry, 
$23.20; Sundries, $158.44. 

Note that the total of the distribution columns equals the 
total column. 

3. The Sundry column contains the following items : — 

Balance, April 1st ... $126.04 

Labor 10.00 

Wood 22.40 

Total $158.44 

Verify Step 3 by setting down each item under its appro- 
priate head and adding. Arrange your work as shown 
above. 



LESSON 7 

CASH PAYMENTS, SET 1 

I. General Instructions. 

See Lesson 6. You will fill in the items between the 15th 
and 23d, omitted in the illustration. If payments are made 
by check and the bills filed for reference, the items need not be 
entered in the Cash Book. The payee, the amount of the 
check, and the distribution are sufficient entries. 

IL Written Work. 

1. Enter the following expenditures for April on Form 3. 
(See page 45.) 

April 1, on Household Expenses, $30.00 (Total and House- 
hold columns) ; 12 bu. Seed Wheat @ 83^jC. 

(3) Labor in Garden, $1.50; shod "Cap" and "Maud," 
$3.00. 

(5) Interest M. P. Co., $20.00; Jersey Cow, $65.00; Laths 
and Shingles, $3.75. 



MODIFIED DOUBLE ENTRY 



47 



Financial Statement. Year Ending' vy*? . ?^-. . ^'^ 19 .^ A 



Receipts 



Balance forwarded 

Graia 

Hay 

Orchard and Garden 
Stock 



Poultry 

Sundries. 

Machine and Implements 
Hired Labor 



C&sh Receipts and Paytnenti^ 



Dairy Producte / j .0 1 1 



Totol 




Payments. 
<f:?e.rSP.>!i.«f. %/ fSZSP 



Houaebold 

Trees, Seeds and Fertilizers. 

Labor 

General Kxpeuee 

Stock 

Machin'M and Lnplements. . 

Farm (improvements) 

Repairs 

Sdndkies: — 

Life Insurance 

PerF>oQal Expense 

Accounts Payable . 

Interest. 

Taxes . 

Gifts. 

Insurance. 



iff* ^OMHdr^. vaO^ 



<**f^**. 



Balance on hand . 
Total.. 




%^f 



Rosourc«* aLiul U«j3Uni««. 



Besociicks. 

Farm (market value) %f01/C<>P, 

Cash and Bank '^T.h f" 

Life Insurance (Paid up value) . . /. /. A* . tP. 

j.f¥isp 



Stock* 

Grain* 

Hay* 

Orchard and Garden* 

Dairy Products* 

Poultry* 

Machines and Implements* 

Household Goods 

General Supplies 



.....4/6 ^C9. 



../ QQ JTJf 
..fS'3\.'>,«. 

jq .io. 



%/M7f.47('- 



LlABILITIia. 



Hired Labor 

Bills Payable 

Accounts Paymbla . 
Gifts , 



9....<J.S^fiO 

4.0 .*p 

.....4^ 0?. 



Total Uf.J.ift']k 



statement of Proftt and Loss. 



Net Worth (as above) ... ...s ..^ _ 

Net Worth last year „ /ASA^'^i. 

Gain for the^year .^. J.0. j'f\ 7 ^ 

LpS (>% Inf. CHT^JesA.^y •^y^JU L, 



ANNUAL STATEMENT 



48 



FARM ACCOUNTING 



Accoiints SKowing' Profit or Loss. Year Ending .//7.4.r.'..K/... 19^;^ 

(Araounls are lali-.n from Inveotories, Cash Book, and Special Records.) 



GRAIN 



Invr.Dtory las 
Labor 



Inter. <t/)n Vp!ue/>f,Land. 



47P ^^ 

if' 



7 



to. 



7/ 



Present Inventory . . 
Receipts from Sales 

Fed to Stock 

Fed to Poultry 



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.0.'? 



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Net Profit 



<S.Sd\.6.P. 



Cost 

Inventory last year %./.^.&&\p. <'. 

Labor *" 

Grain 

Hay 

Interest on Inventory last yeai . 
PftEtura^ on Layl 



Total . 



77 






'jm 



v^u 



fC, 



Rbttirns. 

Present Inventory %.i.^frp. V <* 

Iveceipts from Sales .J.3.P.Q .9.9 

Receipts from Dairy /.d /& _J.% 

Labor (Cash Receipts /.v^TI^./ti 



^ 



77 



ORCHARD AND GARDEN 



Returns. 



{PJZ). 



77 



Inventory last year $ . 

Labor and Marketing 

Interest on Land 



Not Profit 



Present Inventory. 
Receipts 



HAY 
Cost. 

Inventory laat year $. . .'.O 0\0 Present Inventory 

Labor.-.- 3 0\.<}.^. Receipt; 

Interest on Ls.nd h.3 .<?.<? Fed to Stock 

"Net ProatV.'.'.V.V.V.V.". '.'.'.'.!'. '..iff ■j.'S: 



Total $. 

Returns. 






¥j' 



otal ^.s.a.T^'j^ 

(Account) 



Total . 



\.S.X3. 



Cost. 



Total . 



ANNUAL STATEMENT 



(6 
(8 

(9 

(12 
(13 

(14 
(15 

(17 
(19 

(20 

(23 

(25 
(26 
(29 
(30 



MODIFIED DOUBLE ENTRY 45 

Garden Seed, $1.60; Road Tax, $3.00. 

Addition to Barn (contract), $80.00; Crates and 

Bags, $15.40. 
Wages to Johnson, $10.00; Steel Frame Grindstone, 

$3.50. 
200 ft. Lumber @ $10.00 per M. ; 1 Shovel, $1.25. 
On Household Expenses, $30.00; John Smith, labor, 

$2.50 ; Staples, 35c. 
Taxes, $30.40. 
Cash for personal use, $3.50; Rip Saw, $2.50; paid 

0. N. Smith in full, $15.80. 

Pruning Orchard, $2.50 ; Chicken Feed, $5,00. 

Manure from Kimball Livery, $15.00; Horse Shoeing, 
$2.50 ; Trip to Ames, $4.50 ; Patent Fertilizer, $6.40. 

Leghorn Pullet, $2.10; Plastering and Paper Hang- 
ing, $15.00; 2 Halters @ 90c.; Wages to Johnson, 
$10.00. 

On Household Expenses, $30.00; Trees and Shrubs, 

1. N. C, $25.80 ; Alfalfa Seed, $3.20 ; 2 doz. Leghorn 
Eggs, $5.80. 

Interest on Binder note, $2.00; Angora Goat, $10.00; 

Private Expenses, $5.00 ; ^ doz. Gopher Traps, $1.50. 
Repairs on Horse Stalls, $13.50 ; 1 Keystone Dehorner, 

$10.50. 
2 Geese, $3.00; Wages to Johnson, $10.00; Apple 

Boxes, $3.75. 
Butter Wrappers, $1.75; Life Insurance Premium, 

$35.10; Produce for Household, $18.05. 



2. Add the columns. The correct results are as follows : 
Total, $578.80; Household and Personal, $116.55; Seeds and 
Fertilizers, $62.00; Hired Labor, $36.50; General Expenses 
and Marketing, $30.90; Stock and Feed, $90.90; Machinery, 
Implements, and Tools, $21.05; Repairs, $114.60; Sundries, 
$106.30. Your distribution columns may not agree with the 
totals given, but note that the total of the distribution columns 
equals the total column. 

3. By going through the Sundry column we find that it 
contains the following: — 



50 FARM ACCOUNTING 

Interest $22.00 

Taxes 33.4O 

Accounts Payable 15.80 

Insurance 35.10 

Total $106.30 

4. Classify the Improvements and Repairs column. (See 
definition of improvements and repairs, page 39.) The cor- 
rect result is as follows : — ■ 

Improvements $80.00 

Repairs 34.60 

Total ; . . . $114.60 

5. Balance the cash by taking the difference between the 
total receipts and the total expenditures. The correct dif- 
ference is $74.34. 



LESSON 8 
FINANCIAL STATEMENT No. 3 

I. General Instructions. 

Under ordinary circumstances a financial statement should 
be made out only once a year, but for additional practice you 
may prepare a statement covering the first month. As will 
be observed on page 47, this is a condensed statement of cash 
Receipts and Expenditures as they appear in the different 
columns of the Cash Book ; a statement of Resources and Lia- 
bilities ; and, finally, a statement of Profits and Losses. Your 
Balance Sheet will be exactly like the illustration except as 
to amounts. The new inventories are as follows: Farm,^ 
$8,700.00; Cash and Bank, $74.34; Stock and Feed, $2,145.00; 
Grain, $105.00; Hay, $55.00; Orchard and Garden, $35.20; 
Dairy Products, $26.30; Poultry, $122.80; Machinery, Imple- 
ments, and Tools, $870.05 ; Household Accounts, $650.00 ; Life 
Insurance, $1,136.80; General Supplies, $25.00; Hired Labor, 
$85.00; Bills Payable, $3,200.00; Accounts Payable, $326.52. 



MODIFIED DOUBLE ENTRY 51 

II. Written Work. 

1. On a statement blank (Form 12) enter the cash Receipts 
and Payments under the respective titles. The Sundry col- 
umns were segregated in Lessons 6 and 7. 

2. Enter the Resources and Liabilities and check with the 
illustration. Then find the Net Worth and Profit or Loss. 
In this case there is a loss of $1.01, due to the fact that April 
is naturally an unproductive month for the farmer. 

3. The detailed statement of the profits or losses on Grain, 
Stock, etc. (Form 13), will not be taken up until at the end of 
the year (Lesson 11). 

LESSON 9 
CASH RECEIPTS, SET 2 , 

I. General Instructions. 

The next set is similar in principle to Set 1, and is given 
for additional practice. The same forms are used. For the 
purpose of completing a year's work in the next balance sheet, 
we assume the amounts to be forwarded for eleven months, 
March being the last month of our fiscal year. 

II. Written Work. 
Enter as in Lesson 6. 

March 1. Forwarded: Total Receipts (to be entered 
horizontally under the proper headings on Form 
2), $3,644.34; Grain, $591.93; Hay, $134.95; Or- 
chard and Garden, $277.95; Stock, $1,110.50; 
Dairy, $997.07; Poultry, $246.14; Sundries, $285.80. 
(1) 2 Pigs @ $6.25. 

(3) 20 bu. Apples @ 65c.; 50 bu. Potatoes @ 45. 
(7) 3 tons Clover @ $6.50; 1 Veal Calf, $9.00; 40 bu. 

Oats @ 45c. 
(9) 25 lbs. Dressed Chicken @ 20c. 
(10) 10 doz. Eggs @ 15c.; 1 Cow, $45.00. 
(12) 1 ton Clover, $6.50; sold old Wagon, $10.00. 
(15) Hired out Team and Buggy, $4.00; Labor on County 
Road, $5.00. 



52 , FARM ACCOUNTING 

(16) 50 bu. Corn @ 60c.; 95 boxes Strawberries @ 15c.; 

10 lbs. Butter @ 25c. 
(19) 3 tons Timothy @ $5.75; 3 days' Labor for Johnson 

& Co. @ $1.60; 14 doz. Eggs @ 15c. 
(21) 2-year-old Colt, $75.00; Strawberry Plants, $4.60; 18 

lbs. Butter @ 25c.; 4 qts. Cream @ 15c.; 4 Calves 

@ $12.00. 
(24) 50 bu. Oats @ 40c.; 10 Dressed Chickens @ 30c. 
(28) 50 bu. Corn @ 65c.; 3 tons Timothy @ $5.00; sold 

1 set Harness, $32.40; 2 tons Clover @ $5.50. 

(30) 50 bu. Barley @ 40c. 

(31) Produce used for Household, $13.90 (Orchard and 

Garden, $2.80; Dairy, $6.45; Poultry, $4.65). 
(31) From Phoenix Hotel, $7.00 for Cream. 

Add all the columns and prove. The correct total is 
$4,174.24. 

The Sundry column is segregated as follows : — 

Cash Balance forwarded $126.04 

Implements, sales 60.81 

Labor for others 155.15 

Total $342^ 

LESSON 10 
CASH PAYMENTS, SET 2 

I, General histructions. 

In principle same as Lesson 7. 

II. Writtefi Work. 
Enter as in Lesson 7. 

March 1. Forwarded: Total, $3,513.63; Household and 
Personal, $1,028.90; Trees, $99.66; Hired Labor, 
$386.00 ; General Expenses and Marketing, $269.49 ; 
Feed and Stock, $427.85; Machinery and Tools, 
$172.31; Improvements and Repairs, $513.20; Sun- 
dries, $616.22. 

(1) On Household Expenses, $30.00. 

(3) 200 ft. Lumber @ $10.00 per M.; 20 Posts, $1.60; 1 
Shovel, $1.25. 



MODIFIED DOUBLE ENTRY 53 

(7) Strawberry Crates, $4.00; Assessment Farmers' Tele- 
phone Co., $2.00; shod "Prince," $1.50; 1^ bu. 
Timothy Seed @ $1.10. 
(9) 10 bu. Rye Seed @ 60c.; 1 Cultivator, $25.00. 
(10) Setting Tire on Wagon, $3.00; half month's Wages to 

Frank, $15.00. 
(12) Advertising Garden Products, $1.20; Membership in 
Breeders' Association, $3.00; Incubator, $20.00. 

(14) On Household Expenses, $30.00; Insurance, 3 years, 

$29.50. 

(15) 1 set Plymouth Eggs, 50c. 

(16) 2 sets Leghorn Eggs @ 50c.; Dehorning Cattle, $3.25; 

100 lbs. Wire @ 3c. 

(17) Labor on Ditch No. 1, $16.50; Labels for Apple Boxes, 

$4.20 ; Garden Seeds, $3.40. 
(19) Carpentry Tools, $2.50; Harness Oil, $1.00; Bran and 

Shorts, $5.60; Subscription to Y. M. C. A., $5.00. 
(21) 10 lbs. Nails @ 6c.; Blacksmithing as per bill, $3.00; 

40 Apple Trees @ 20c.; 10 Peach Trees @ 25c.; 

paid Frank on Wages, $5.00; 5 sacks Phosphate @ 

$1.70. 
(24) On Household Expenses, $30.00; Labor in Orchard, 

$2.00. 
(26) Shovel and Hoe, $1.50; Allowance for James at col- 
lege, $20.00. 

(28) 1 Plowshare, $3.20. 

(29) Balance Wages to Frank, $10.00; 1 bbl. Salt, $2.50; 

2 Pigs @ $2.25 ; Church Subscription, $5.00 ; Shin- 
gles and Nails, $1.00. 

(30) Taxes, $38.60; paid George for keeping books, $5.00 

(Personal column). 

(31) Produce for Household, $13.90; Labor in Garden, 

$1.20. 

Add all the columns and prove. The correct total is 
$3,902.28. 

If you could go through the entire Sundry column for the 
year, you would find the following items : Life Insurance, 
$54.30; Accounts Payable, $252.32; Insurance, $29.50; Inter- 



54 FARM ACCOUNTING 

est, $230.00; Taxes, $38.60; Charities, etc., $94.60. The Im- 
provements and Repairs column is segregated as follows: 
Improvements, $350.00; Repairs, $174.40. The Household 
and Personal column would be segregated in the same manner. 
Arrange the segregation as illustrated on page 50. 

LESSON 11 
FINANCIAL STATEMENT No. 4 

I. General Instructions. 

Having reached the end of our fiscal year, we are now 
ready to make a complete analysis of the business. First, we 
prepare the financial statement on Form 12, the same as in 
Lesson 8. Then we analyze the accounts showing profit or 
loss on Form 13. 

II. Written Work. 

Complete Form 12 by inserting the amounts in their order. 
The inventories are as follows : — 

RESOURCES. 

Farm $9,070.00 

Cash and Bank 271.96 

Stock and Feed 1,948.50 

Grain 380.00 

Hay 168.75 

Orchard and Garden 45.00 

Poultry 100.55 

Machinery and Implements 953.00 

Household Goods 682.40 

General Expense and Marketing 37.80 

Life Insurance 1,136.80 

Total Resources $14,794.76 

I.IABILITIES. - 

Hired Labor $35.00 

Bills Payable 3,200.00 

Accounts Payable 90.00 

Gifts 40.00 

Total Liabilities " 3,365.00 

The Net Worth is $ (?) 

The Net Profit is $ (?) 



MODIFIED DOUBLE ENTRY 55 

If you deduct from last year's inventory the value of House- 
hold Goods, Life Insurance, Cash, and $2,220.00 as the value 
of the dwelling house, the productive investment is $6,265.64; 
Deducting 6 per cent, on this investment, the proprietor's 
earnings are $718.85. To this should be added the amount 
drawn for personal use. 

Accounts ShoM^ing Profits or Loss 

Consult illustrations, pages 47 and 48. 

It is assumed that special labor and feed records (Forms 
6 and 9) have been kept during the year, and we are now 
ready to analyze our leading accounts showing profits or 
losses. The first of these accounts is Grain. We must debit 
this account with all the elements that enter into the cost of its 
production, and credit it with the returns. The first item of 
cost in last year's inventory (Financial Statement, No. 2; 
Lesson 4) is $377.86; Labor (Horse and Man, from Labor 
Record), $440.00; Interest on the value of Land devoted to 
Grain (56 acres @ $55.00 per acre), 6 per cent., $184.80; 
Seeds and Fertilizers (Cash Payments), $129.71. The re- 
turns are : Present Inventory, $380.00 ; Cash Receipts, $712.43 ; 
Fed to Stock (Feed Record assumed), $770.07; Fed to Poul- 
try, $50.00. From this we obtain the net profit, $780.13. 

In a similar manner we consider the Stock account and the 
Hay account. The illustrations, pages 47 and 48, show the 
figures supplied from each account. Complete the statement 
and find the profit or loss of each account. 

It should be borne in mind that this exercise in cost account- 
ing is only suggestive. The principles are fundamental and 
correct, but their application in practice may vary greatly. 
Thus, some farmers will charge live stock a certain amount 
for housing, perhaps also for the use of utensils, machinery, 
and the like ; others will insist on deducting the cost and care 
of the dwelling from the annual farm inventory, since thfe is 
not capital invested in the business. For a full discussion of 
this subject, see Bulletin 73, Bureau of Statistics, U. S. De- 
partment of Agriculture. The interpretation and use of the 
results obtained is a subject far too extensive for this treatise. 



CHAPTER IV 

HOUSEHOLD ACCOUNTS 

It will be seen that no provision has been made in the gen- 
eral Cash Book for separate items in the household accounts. 
This is left for the housekeeper. The fact that her field is 
somewhat limited from a business point of view is no argu- 
ment in favor of loose and careless methods of accounting. 

Most housekeepers prefer to receive a fixed allowance for 
household expenses, whenever it is practicable. For our pres- 
ent purpose we will suppose that the following agreement has 
been entered into between the farmer and his wife. She is 
to receive the following: — 

Monthly AUow^ances for Household and Personal Expenses 

For proprietor and wife $25.00 

Board for hired help 15.00 

For four children 32.00 

Sundries 18.00 

Total $90.00 

In addition to the cash allowance, vegetables, poultry, and 
dairy products are furnished from the farm at market price. 
The proprietor gives his wife an allowance of $90.00 each 
month either in one or in several payments, and enters it in 
his cash expenditures. His wife, in turn, enters her allowance 
in her record. Bills for furniture, clothing, and utensils are 
pasted or filed in a Bill and Receipt File in the same manner 
as in the farm accounts. 

Note that the items entered in columns one or two are also 
entered in columns eight, nine, or ten, since they are purchases 
from the farm. Because they are entered both as receipts and 
payments, they do not affect the cash balance. 

At the end of the year the proprietor enters the totals of 
columns one and two in his cash receipts under the proper 

(56) 



HOUSEHOLD ACCOUNTS 57 

headings, and at the same time they are entered as cash pay- 
ments in the Household column. (See page 44, under April 
30th.) Thus, the farm will receive full credit for what it 
sells to the household as well as to others. 

It is suggested that the housekeeper open a private bank 
account and pay large items by check. (See April 13th, 29th, 
and 30th.) There are numerous advantages in keeping a bank 
account. (See page 25.) A bill for furniture, utensils, and 
improvements should always be taken and pasted in the Bill 
File. It is convenient to number the bills the same as the 
checks, as suggested in column six. Since indorsement by the 
payee constitutes receipt, it is generally unnecessary to require 
a receipt when payment is made by check. 

Page 60 shows a convenient form of a combined household 
Cash Book and Ledger. A summary of the receipts and pay- 
ments is prepared at the end of the year, as shown on page 62. 

Trial Balance 

The accuracy of the work is tested at the end of each page 
or each month as follows : — 

Groceries $13.05 

Meat 11.80 

Dairy and Poultry 12.40 

Clothing 16.85 

Furniture and Utensils . 22.05 

Help and Laundry 11.60 

Library 6.65 

Light and Fuel 6.10 

Gifts 2.35 

Personal 1.25 

Travel and Recreation 3.00 

Incidental 2.65 

Physician and Medicine 1.50 

Telephone Rental 1.50 

Total $112.75 

Observe that this total agrees with the total given on 
page 61, 



58 FARM ACCOUNTING 

Illustrative Lessons 

LESSON 12 
HOUSEHOLD ACCOUNTS, SET 1 

I. General Instructions. 

See illustration, page 60. The columns are used exactly as 
in Lesson 6. Use Forms 4 and 5. Note that produce taken 
from the farm is entered in both the receipts and expenditures, 
since no cash is paid out. The farm will be credited with the 
produce at the end of the month or year in the farm accounts. 

If payments are made by check, and the bills filed, the items 
need not be entered in the Cash Book. The payee, the amount 
of the check, and the distribution are sufficient entries. 

II. Written Work. 

1. Enter the following Household Receipts and Expendi- 
tures for the month of April, 1908. (See illustration, page 60. ) 

April 1. Balance forwarded, $15.40 ; on Allowance, $30.00 ; 
Shoes for Mabel, $3.00; 2 Vests, $1.00; 10 yds. 
Muslin @ 10c. ; 4 yds. Gingham @ 15c. 

(3) Sugar, $1.00 ; Raisins, 25c. ; Subscription to Successful 
Farming, $1.00 ; Subscription to Ladies' Home Jour- 
nal, $1.75. 

(5) Collection, 25c. ; Ladies' Aid Society, 25c. ; 2 doz. Eggs, 

40c. ; Medicine, 50c. ; Stove Polish, 10c. 

(6) Doctor, $1.00; Ella, 25c.; George, 50c.; Necktie for 

Jim, 25c. ; 5 bu. Potatoes @ 40c. ; Skillet, 50c. 

(8) 5 Cabbages, 25c.; Bread Knife, 40c.; Meat, 50c.; Par- 

lor Lamp, $3.00. 

(9) 3 lbs. Crackers, 25c.; Peanuts, 10c. ; Eggs, 50c.; to 

boys for ball game, 50c. ; Starch, 10c. ; Relief So- 
ciety, 50c. 

(12) Collection, 35c. 

(13) Rocker, $7.00; Prunes, $1.00; on Allowance, $30.00; 

Coal, $5.00 ; Vegetables, 40c. 

(14) Suit for William, $6.00; Hat for George, 75c.; Con- 

cert, $1.00; 2 yds. Ribbon, 40c.; 1 doz. Plates, $2.20; 
l doz. Cups and Saucers, 90c. 



HOUSEHOLD ACCOUNTS 59 

(15) Schoolbooks and Stationery, $2.40; Kerosene, 75c.; 

Ham, $1.35 ; Sociable, 50c. ; Shoe Strings, 10c. 
(17) Kitchen Cabinet, $6.50; 2 Chairs, $1.30; Laundry, 

97c.; Toilet Soap, 25c.; 3 lbs. Fish, 45c.; Towel 

Rack, 25c. 

(19) Collection, 25c. 

(20) 6 yds. Toweling, 60c.; Tacks, 10c. ; 1 gal. Vinegar, 

30c.; Matches, 25c.; White House Cook Book, $1.50; 
Carbolic Acid, 10c. 
(23) Telegram to M. F. & Co., 50c.; Telephone Rental, 
$1.50; Mrs. Sloan for Dressmaking, $2.50; Madrid 
and return, $2.00. 

(25) 1 pr. Rubbers, 75c.; Stockings for Ella, 50c.; Flowers 

for Mrs. Knox's funeral, $1.00; Allowance, $30.00; 
Laundry, 65c.; Lamp Wicks, 10c. 

(26) Collection, 25c. 

(29) Meat, City Market, as per bill on file, $9.50 ; Groceries 

at Murdock's, as per bill on file, $4.40 ; Help for the 
month, $10.00. 

(30) Vegetables for the month, $2.60 ; Poultry, $5.40 ; Milk, 

Cream, and Butter, $6.50. 

2. Add all the columns. (Use lead pencil until you have 
proved your work.) If your work is correct, you will find the 
following totals: Receipts. — Cash, $105.40; Produce, $5.25; 
Dairy and Poultry, $12.80. Payments. — Groceries, $12.65 
(see correction, page 61) ; Meat, $11.80; Dairy and Poultry, 
$12.80; Clothing, $16.85; Furniture and Utensils, $22.05; 
Help and Laundry, $11.60; Library, $6.65; Medicine and Phy- 
sician, $1.50; Light and Fuel, $6.10; Gifts, $2.35; Personal, 
$1.25; Traveling and Recreation, $3.00; Incidental, $4.15. 



LESSON 13 

HOUSEHOLD ACCOUNTS, SET 2 
I. General Instructions. 

Use Forms 4 and 5. In principle this is exactly like Les- 
son 6. 



60 



FARM ACCOUNTING 



HOUSEHOLD ACCOUNTS 




*Entered both as receipt and payment because it is taken from the farm. 

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61 



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62 



FARM ACCOUNTING 



SUMMARY OF HOUSEHOLD ACCOUNTS, 



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SUMMARY OF HOUSEHOLD ACCOUNTS 



HOUSEHOLD ACCOUNTS 63 

II. Written Work. 

Enter as in Lesson 12 the following Household Receipts and 
Expenditures : — 

March 1. Amount forwarded, $21.60. 

(1) Oranges, 25c.; James, 35c.; Codfish, 35c.; Allowance, 
$30.00; Coffee, $1.00; Bacon, 50c.; Shoe Laces, 10c. ; 
Fish, 25c. ; Veal, 10c. ; Whalebone, 10c. ; Stove Pol- 
ish, 25c. 

(3) Jardiniere, 25c.; Collars, 25c.; Tacks, 10c. ; Collection, 
25c. ; Buttons, 10c. ; Toothbrush, 25c. ; Talcum 
Powder, 25c. ; Stamps,. 25c. ; Oranges, 25c. ; Thread, 
15c. ; Meat, 50c, ; Crackers, 25c. 

(7) Help, $1.00; Roast, 55c.; Delineator, 10c. ; Pepper, 
15c. ; Comb, 25c. ; Oatmeal, 25c. ; Meat, 40c. 

(9) Collection, 25c. 
(10) Gloves for Ella, 75c.; Postage, 25c.; Starch, 10c. 
(12) Chops, 25c.; Beans, 25c.; Mustard, 20c. ; Soap, 30c.; 
Borax, 15c. ; Pattern, 45c. ; Muslin, 50c, ; Music, 
20c. ; Gasoline, $1.20 ; Picture Frames, $3.45. 

(14) Starch, 25c,; Help, $1,00; Laundry, $1,00; Allowance, 

$30.00, 

(15) Coffee, 35c,; Music, 25c,; Collection of Poems, $1.50. 

(16) Collection, 25c. 

(17) Telephone Rental, $1,50; Steak, 30c,; Rocker, $3.75; 

Suit for George, $15.00 ; Skirt Cleaned, 75c. ; Cheese, 

50c.; Tongue, 25c.; Thread, 10c. ; Toothpicks, 10c. ; 

Sugar, $1.00; Medicine, 50c. 
(19) Lemons, 20c.; Lace, 15c.; Telegram, 60c.; Scissors 

Sharpened, 10c, ; Flour, $1.20; Graham, 25c.; Rock 

Candy, 10c. ; Coal, $5,00; Powdered Sugar, 25c.; 

Granulated Sugar, $1.00; Piano Tuned, $5,00; 

Oranges, 25c,; Birthday Present to Mother, $5.00. 
(21) Laundry, 55c.; Help, 75c.; Pens and Pencils, 10c. ; 

Hat, $4.00; Hooks and Eyes, 10c. ; Collar, 35c.; 

Sugar, $1.00; Crackers, 10c. ; Cheese, 25c.; Mustard, 

10c. 

(23) Collection, 25c. 

(24) Braid, 45c.; Fish, 15c,; Coffee, 45c.; Picture of Baby, 



64 FARM ACCOUNTING 

$1.50 ; Asbestos Pad, 15c. ; Roast, 45c. ; Orangeg, 
20c. ; Allowance, $30.00. 
(26) Help, $2.00; Tailoring, $1.45; Pepper, 10c. ; Needles, 
10c. ; Trip to Boone, $2.00; Hats for George and 
James, $3.50. 

(28) Ella, $1.00 ; Shoes Repaired, $1.25 ; Flower Seed, 25c. ; 

Braid, 15c. ; Thread, 10c. 

(29) Help for month, $10.00; Laundry, $1.00. 

(30) Collection, 35c. 

(31) Butter, Milk, and Cream for month, $6.45; Poultry 

for month, $4.65 ; Vegetables for month, $2.80. 

Add all the columns. The results should be: Receipts. — 
Cash, $111.60; Garden, $2.80; Dairy, $6.45; Sundries, $4.65. 
Expenditures. — Groceries, $12.75; Meat, $3.70; Poultry and 
Dairy, $11.85; Clothing, $29.00; Furniture and Utensils, 
$7.60; Help and Laundry, $17.30; Books and Education, $2.05; 
Physician and Medicine, 50c. ; Light and Fuel, $6.20 ; Gifts, 
$6.35; Personal, $1.35; Incidental, $13.95. Balance as before. 



LESSON 14 
CONTINUED INVENTORY 

I. General Instructions. 

Where the farmer keeps only a bank account and a detailed 
inventory, it is advisable to keep the inventories in the con- 
tinued form, illustrated on page 17. It is well, also, to use 
the first column for memoranda of dates of purchase, births, 
etc. The ordinary Trial Balance Book, which may be pur- 
chased in any stationery store, at a very reasonable price, is 
the best book for the purpose. 

II. Written Work. 

Prepare a continuous inventory from Statements Nos. 1, 2, 
and 4 similar to the illustration on page 17. 



SUPPLEMENTARY EXERCISES 65 

Supplementary Exercises 

To be assigned at the discretion of the instructor. 

1. ORIGINAL FARM ACCOUNTS 

In order to gain additional practice and confidence in your 
work, you may now prepare an original set similar to the ones 
already worked out. Study over the work already completed, 
and if you have any suggestions and criticisms of the system 
of accounts, talk them over with your instructor. If your 
suggestions are acceptable, you may embody the changes in 
this set, otherwise you will follow the preceding sets very 
closely. The complete set must have at least five entries in 
each column, and the totals should not be far from those in 
the sets already completed. A higher grade of work is ex- 
pected than heretofore. 

Directions. 

1. Prepare an inventory similar to the one shown on page 
17. The amounts should be close to the results given in 
Lesson 1. 

2. Write two months' imaginary entries as close to actual 
experience as possible. Students from the farm should secure 
the material from home or from farmer friends. 

3. Complete the year's work by taking estimates for the 
remaining months. 

4. Prepare a closing inventory for the end of the year. 

5. Prepare a statement similar to the one given on 
page 47. 

6. Hand in your work with suggestions and criticisms. 

2. ORIGINAL HOUSEHOLD ACCOUNTS 

Prepare an original household record on the same plan as 
the original farm record. The totals should conform approxi- 
mately with one of the months in the household summary. 

Hand in your work for approval. 

3. ORIGINAL BALANCE SHEET 

Prepare a balance sheet of the work done in the two pre- 
ceding lessons, exactly like the one you prepared last, and hand 
in for approval. 



66 FARM ACCOUNTING 

4. SHOP ACCOUNTS 

Farm and shop bookkeeping do not differ in principle. 
They differ only in titles of accounts. The books used are the 
same as in the farm accounts, except special records adapted 
to the needs of the shop. The labor record need not differ 
at all. Taking the Cash Book furnished in your set, note that 
the number of columns and the arrangement are exactly the 
same as in the farm accounts. Only the titles of the columns 
are different. The titles given below are self-explanatory, 
except the Merchandise and the Supply column, A large num- 
ber of shops and mills carry a small stock of merchandise 
which is sold at retail. Where this is done, it is preferable to 
keep it strictly separate from the manufacturing end of the 
business. The shop should buy from the store at regular 
prices, and charge it v/ith any supplies furnished for sale. 
Where it is found impracticable to keep a separate set of 
books, a column is provided for receipts from merchandise sold 
and one for payments for merchandise purchased. Taking 
into account the inventories at the beginning and end of the 
year, these columns give the result of this branch of the busi- 
ness. In the Supplies column is entered only consumable 
material used in the process of manufacture, such as oil, cotton 
waste, sandpaper, files, and the like. The Sundries column is 
used for all items which do not fall under any special column. 
For instance, if interest is paid on a note, it is entered in the 
Total Payments column and also in the Sundries column. It 
is frequently necessary to show hospitality in closing deals 
in which a shop of any consequence is interested. Such 
entertainment expenses would be entered in the Sundries 
column. 

Directions. 

1. Head all the columns in the Cash Book as follows: 
Under Receipts — Merchandise, Manufacturing, Under Pay- 
ments — Hardware, Lumber, Supplies (Machinery and Tools), 
Repairs, (Buildings and Improvements), Labor, (Freight and 
Express), Office, (Light, Fuel, and Power), Merchandise. 

2. Prepare an imaginary inventory of a planing mill, 
with $10,000.00 capital, having a merchandise inventory of 



SUPPLEMENTARY EXERCISES 67 

$2,000.00 consisting of house fittings, light hardware, etc. 
Use the form illustrated on page 18. 

3. Write up an imaginary month's business of receipts and 
payments, taking care that there be at least two entries illus- 
trating each column. Follow the plan illustrated on pages 
44 and 45. 

4. From the above figures prepare a probable estimate of 
the year's business. 

5. Prepare a statement similar to the one shown on 
page 47. 

6. Hand in your work for approval and criticism. 



LESSON 15 
REVIEW QUESTIONS 

Write the following questions and their answers on paper 
8^ X 11 inches and submit to your teacher for approval: — 

1. What is the object of keeping books? 

2. What is the use of the Day Book? Prepare a specimen 
Day Book page of at least five entries. 

3. What entries are properly made in the Day Book? 

4. Describe the Bill and Receipt File and explain its use. 

5. How is an inventory taken? Of what does it consist? 

6. What are Resources? Liabilities? Profits? Losses? 

7. What are Accounts Receivable? Accounts Payable? 

8. Prepare a specimen Account Receivable and also a speci- 
men Account Payable. 

9. What should determine the time of the year when the 
farm balance sheet is taken? 

10. What are the disadvantages of single entry? 

11. Prepare a specimen of each of the special records sug- 
gested on pages 102 to 105. 

12. Which is the principal book in the second method 
(modified double entry) ? 

13. What is the value of the special column provided in 
the Journal? Suggest columns that might be added. 

14. How is each side of the Cash Book balanced? 

15. How do you find the cash on hand? 



68 FARM ACCOUNTING 

16. If a bank account is kept, how do you find the cash on 
hand ? 

17. Describe how household accounts are kept. 

18. What allowance for household besides cash? Why are 
these allowances both debited and credited at the time they 
are entered? How are these allowances entered in the gen- 
eral Cash Book? 

19. How is the cash on hand found in the household ac- 
counts ? 

20. Describe how the Sundry columns are itemized. 

21. Of what three principal headings does the financial 
statement consist? 

22. State the steps necessary in preparing the financial 
statement. 

23. State some of the advantages of banking. 

24. What is meant by depreciation? What are the rates 
commonly used? 

25. How may land be said to depreciate in value? 

26. Describe three methods of finding the profit, or loss, 
from live stock. From different crops. 

27'. What is the principle difference between farm and shop 
accounts ? 

28. How may a large crop prove to be a loss to the com- 
munity? 

29. Write a paragraph pointing out the importance of 
records for the farmer. 

30. Write a paragraph of general review of the system of 
bookkeeping you have now finished, and point out its merits 
and defects. 

31. In finding the actual net gain or loss on accounts of 
production, what corrections must be made? 

32. Give the rule for finding the profit or loss m the balance 
sheet. 

33. What is the distinction between equipment and sup- 
plies? 

34. What is the distinction between improvements and re- 
pairs? 



Third Method 

A system of double entry, best adapted to a business having 
a large number of personal accounts. The Ledger is the 
basis of the system ; the Journal is a modification of the Day 
Book, containing the original entries, the cash account, and 
the classification of entries. 



CHAPTER V 

DOUBLE ENTRY 

In a credit business, where the titles of accounts are nu- 
merous and where goods are bought and sold on account, it 
is necessary to use a Ledger instead of special columns in 
the Cash Book. The two methods are often combined by 
carrying the details of certain accounts in special columns in 
the Journal and Cash Book and posting only the totals into the 
Ledger. The Ledger is practically always used in commercial 
bookkeeping. The only essential difference between commer- 
cial and farm bookkeeping lies in the titles of accounts. The 
chief sources of the farmer's profit are generally shown under 
crops, live stock, dairy, etc. ; that of the merchant under 
merchandise; those of the banker under interest, discount, 
and so on. The principles of accounting are the same in 
all cases. 

Books and Accounts 

The double entry Journal and Ledger will be employed in 
this method. Since it is designed to illustrate a variety of 
titles, the expense account has been divided into freight, 
interest, discount, and general expense, while the trading 
account is divided into grain and feed, and produce. The 
accounts are further discussed in Lesson 17. 

The Journal 

The Journal is a book of record in which entries are ar- 
ranged under debits and credits in a convenient form for 
posting. The simplest form has two money columns, one 
for debits and the other for credits, but it is often convenient 
to use special additional columns for accounts having frequent 
entries, such as cash, etc., as illustrated on page 78. 

The Ledger 

The Ledger is a book of record in which entries are classi- 
fied under separate heads or titles called accounts. The left 

(70) 



DOUBLE ENTRY 71 

side of the account shows the debits and the right side the 
credits. (See page 77.) A Ledger account is balanced by 
deducting the smaller side from the larger, as shown on page 
82. A double entry Ledger must be in balance at all times; 
that is, the debits must equal the credits. 

Terms aiid Definitions 

One object of this set is to familiarize the student with 
terms frequently used in business. The following list of terms 
should be learned thoroughly in connection with Lessons 16 
and 17. 

Account. — A collection of debits and credits under one title, 
such as cash, produce, merchandise, John Jones, etc. 

Accounts Receivable. — Amounts due the business from 
others. 

Accounts Payable. — Amounts due others from the business. 

Allowances. — Amounts paid for the use of rnoney or serv- 
ices, such as interest, discount, taxes, etc. 

Assets. — The property or capital of the business. 

Balance Sheet. — A formal statement of the results of a 
business for a given period, usually shown under resources 
and liabilities, losses and gains, net worth or net insolvency. 

Balance. — The difference between the debits and credits in 
an account. 

Bank. — A market for money and credit; an institution for 
the safe keeping of money. 

Bills Payable. — Signed obligations due others. 

Bills Receivable. — Signed obligations due the business. 

Bookkeeping. — A record of business transactions. 

Business Transaction. — Exchange of values or services. 

Capital. — The amount invested in a business. 

Cash. — Money and negotiable papers payable at sight, used 
as money, such as checks, bank drafts, money orders, etc. 

Cash Book. — A record of cash receipts and payments. 

Credit. — A statement of obligations by the business, of a 
gain, or of goods parted with. 

Debit. — A statement of obligations to the business, of a loss, 
or of goods received. 

Discount. — An allowance paid for the advance of money or 
for payment of bills in advance of due date. 



72 FARM ACCOUNTING 

Double Entry. — A system of bookkeeping in which the 
debits always equal the credits, and in which accounts are kept 
with persons, things, and allowances. 

Draft. — An order of one party on a second to pay money 
to a third party. 

Drawee. — The party who pays a draft. 

Drawer. — The party who issues a draft. 

Expenses. — Costs of conducting the business. 

Good Will. — An amount which a business is assumed to be 
worth above the net property assets. It depends on the earn- 
ing capacity of the business. 

Insolvency. — The net amount by which the liabilities exceed 
the assets. 

Interest. — The amount paid for the use of money. 

Inventoi^y. — A statement of the assets and liabilities of the 
business. 

Invoice. — An itemized statement of goods bought or sold. 

Journal. — A book in which entries are arranged under 
debits and credits in a convenient form for posting. 

Ledger. — A book in which entries are classified under sepa- 
rate heads or titles called accounts. The left side of the 
account shows the debits and the right side shows the credits. 

Liabilities. — Accounts and obligations due others from the 
business. 

Merchandise. — Goods bought and sold for profit. 

Payee. — The party to whom payment is made. 

Posting. — Entering debits and credits under the respective 
accounts in the Ledger. 

Principal Books. — Books from which or to which posting 
is done. 

Present Worth. — The excess of assets above liabilities. 

Resources. — Same as assets. 

Single Entry. — A system of bookkeeping in which accounts 
are kept with persons only. 

Trial Balance. — A comparison of the debits and credits of 
the Ledger in order to ascertain their equality. 

Voucher. — A written statement or evidence of a business 
transaction. 



DOUBLE ENTRY 73 

General Principles 

(1) In the ordinary Journal and Ledger method of double 
entry bookkeeping there are one or more debits and one or 
more credits involved in every transaction, and the debits 
always equal the credits. (2) In double entry accounts are 
kept, not only with persons, but also with property and allow- 
ances. 

ILLUSTRATIONS 

(a) Smith buys a Jersey cow for which he pays cash, 
$65.00. Here Live Stock is debited because it comes into our 
possession, and Cash is credited because it goes out of our 
possession. (See illustration, page 77.) 

(b) Smith hands his wife $30.00 for household use. Here 
Household is debited because it was the cause of an outlay, 
and Cash is credited because it went out of our possession. 
The $10.00 expended on crops, page 77, is treated in a similar 
manner. 

(c) Smith sold 80 bu. Corn for $52.00 cash. Here Cash is 
debited because it comes into our possession and Crops are 
credited because corn goes out of our possession. Grain 
might have been used as the title of the account instead of 
Crops; Hay, Seed, Fruit, Vegetables, etc., are other titles 
which might be used, according as the farmer desires minute 
classification or more general accounts. 

General Rules for Journalizing 

Debit (always left side) ^ Credit (always right side) 

1. Things that come into 2. Things that go out of 

our possession. our possession. 

3. Persons who get into 4. Persons who get out of 

our debt, or when we get out our debt, or when we get into 

of their debt. their debt. 

5. Alloivances, when al- 6. Alloivances, when al- 
lowed to others. lowed to us. 

The General La^v of Debit and Credit 

The foregoing rules may be stated in the form of a general 
law, as follows : — 



74 FARM ACCOUNTING 

Debit whoever or whatever causes an outlay or a decrease 
in assets. 

Credit whoever or whatever causes an income or an increase 
in assets. 

EXERCISE 

Suppose we have the following transactions during the 
month of April, 1909, and we decide to record them in a 
Journal and Ledger: — 

April 1. Bought 12 bu. Seed Wheat for cash, $10.00; 
sold 2 tons Clover for cash, $12.00 ; paid $30.00 for 
Household Expenses; sold 80 bu. Corn @ 65c. — 
$52.00. 

(5) Bought 1 Jersey Cow for cash, $65.00. 

(6) Sold 2 Steers for cash @ $40.00. 

(7) Sold 100 bu. Corn to J. N. Smith on account @ 65c. 

Prepare the journal entries. Study the form on page 75 
and apply the rules for journalizing. 

Posting 

Posting is the transferring of debits and credits from other 
books into the Ledger under individual titles called accounts. 
Since all the debit items are found in the left money columns 
in the Journal and all the credit items in the right columns, 
ft is evident that they should occupy the same columns in the 
Ledger. Trace the above entries into the Ledger on page 77. 



DOUBLE ENTRY 



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COMMON DOUBLE ENTRY JOURNAL 



76 FARM ACCOUNTING 

Illustrative Lessons 

LESSON 16 
JOURNALIZING 

I. General Instructions. 

Journalizing is arranging debits and credits in a convenient 
form for posting. Use four-column Journal paper. If this 
is not furnished in your outfit of blanks, rule additional col- 
umns to correspond with the illustration, page 17. Follow 
the directions and rules given on page 73. Skip one line 
between each entry, placing the date on this line, as illustrated 
on page 78. All cash is entered in the first two money col- 
umns, and all other amounts in the next two columns. Copy 
the opening paragraph in the explanation column. The Day 
Book part is written first and the Ledger titles immediately 
below, as illustrated. Many bookkeepers post without jour- 
nalizing, directly from the invoice or Day Book, but for the 
beginner it is preferable to use the Journal. 

II. Written Work. 

Following are extracts from your Day Book, as produce 
merchants, which you will now journalize: — 

June 1, 1910. 
Student (write your name) and Edward Harvey have this 
day formed a copartnership under the firm name of Student 
& Harvey, for the purpose of conducting a feed and produce 
business at Auburn, 111. Each partner invests $3,000.00 cash. 
The profits and losses are shared equally. The student is to 
receive $100.00 a month for his services and Mr. Harvey 
$80.00 a month. The student is a skilled accountant and will 
have general charge of the office. (Write the opening entry 
in the Journal as illustrated on page 18.) 

(1) Each partner has paid his investment. (Dr. Cash; 
Cr. each partner. Rules 1 and 4, page 73.) De- 
posit $6,000.00 in the First National Bank. Keep 
a special bank account, as illustrated on page 26. 
No entry of deposits is required in the Journal. 



DOUBLE ENTRY 



77 






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1 1 i 






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DOUBLE ENTRY LEDGER 



78 



FARM ACCOUNTING 




DOUBLE ENTRY JOURNAL 



DOUBLE ENTRY 79 

Deposit all cash as it comes in and make all pay- 
ments by check. 

(2) Bought store and fixtures of Wm. Hayward & Co., 110 

W. Green St.: Building and Lot, $2,000.00; Fur- 
niture and Fixtures, $500. Paid (check No. 1) 
$1,000.00 ; gave our note, due in 60 days, for the 
balance. (Dr. Real Estate, and Furniture and Fix- 
tures; Cr. Cash and Bills Payable. Rules 1 and 
2, page 73.) 

(3) Rented store room. No. 9 Canal St., for $40.00 a 

month. Paid one month in advance. (Dr. Ex- 
pense; Cr. Cash. The expense account is some- 
times divided into Rent, Salaries, Light and Fuel, 
etc., but here the expense account includes all such 
items.) 

(4) Bought of Willard Johnson, Ames, Iowa, on account: 

20 tons Timothy Hay @ $15.00; 25 tons Prairie 
Hay @ $12.00. (Dr. Grain and Feed; Cr. Willard 
Johnson.) Paid freight on above, $85.00. (Dr. 
Freight; Cr. Cash.) Sold to Richard Morris, 340 
W. 10th St., on account: 10 tons Timothy Hay @ 
$18.00. (Dr. Richard Morris; Cr. Grain and Feed.) 

(5) Sold to John Rollins, 432 E. 5th St., on account: 5 

tons Prairie Hay @ $15.00. 

(6) Paid Willard Johnson for invoice of June 4. Bought 

of Winkle Elevator Co., Bancroft, Iowa : 1 car 
Wheat, 997 bu. @ 97c.; 1 car Barley, 830 bu. @ 
51c.; 1 car Corn, 1,073 bu. @ 69c. (Freight pre- 
paid; Dr. Grain and Feed; Cr. Winkle Elevator 
Co.) 

(8) Received cash of Richard Morris, on account, $100.00. 

(9) Sold to Star Milling Co., Detroit, Mich., on account: 

500 bu. Wheat @ 99c. Received of John Rollins 
his note, due in 10 days, payable at Citizens' Na- 
tional Bank, in full of his account; interest, 6 per 
cent. 
(10) Bought of Horton, Brown & Co., Spring Valley, Iowa, 
on account: 1,500 doz. Eggs @ 21c.; 500 lbs. But- 
ter @ 27ic.; 100 lbs. Y. A. Cheese @ 15c. Paid 



80 FARM ACCOUNTING 

Freight on above, $3.50. Paid Cramer & Co. for 
Office Supplies, $15.00. (Dr. Expense; Cr. Cash.) 
Sold to Hotel Emery, on account, 90 doz. Eggs @ 
25c. 

(11) Accepted Horton, Brown & Co.'s draft on us in favor 

of Richard & Lytton, at 3 days' sight, payable at 
Citizens' National Bank, for amount of invoice of 
June 10. (Dr. Horton, Brown & Co.; Cr. Bills 
Payable.) Sold to Western Produce Co., Chicago, 
on account : 900 doz. Eggs @ 25c. ; 300 lbs. Butter 
@ 29c. 

(12) Paid Winkle Elevator Co., on account, $1,000.00. 

(13) Sold to Chicago Malting Co., on account, 415 bu. 

Barley @ 60c. Received remittance from Star 
Milling Co., in full of invoice of June 9. 

(15) Paid our acceptance of June 11, due to-day. Gave 

Winkle Elevator Co. our note at 30 days, payable 
at First National Bank, for balance of account. 

(16) Gave Edward Harvey a check of $100.00 for his 

private use. (Dr. Edward Harvey; Cr. Cash.) 

(17) Sold to Empire Livery, on account, 300 bu. Corn @ 

75c. 

(18) Sold to G. W. Gardner, for cash, 25 bu. Corn @ 74c. 

(Dr. Cash; Cr. Grain and Feed.) 

(19) Received cash of John Rollins for his note due to-day, 

with interest at 6 per cent. (Dr. Cash; Cr. Bills 
Receivable and Interest.) 

(20) Sold to Henry Simmons' Sons 300 bu. Barley @ 60c. 

They paid $100.00, balance on account. (Dr. Henry 
Simmons' Sons, $80.00, Cash, $100.00; Cr. Grain 
& Feed, $180.00.) 

(22) Sold to Condon Construction Co., on their 60-day note : 

10 tons Prairie Hay @ $12.25 ; 10 tons Timothy @ 
$15.00; 300 bu. Corn @ 75c. 

(23) Student renders an itemized bill for small expense 

items paid in cash as follows: Stationery, $3.25; 
Collections and Exchange, $3.40; Entertainment, 
$5.40; Postage, $3.00; Telegram, $1.75; total of 
Check, $16.90. (Dr. Expense; Cr. Cash.) 



DOUBLE ENTRY 81 

(24) Paid for 6 tons Coal @ $4.00, for use in store. 

(25) Sold to Hotel Emery, on account: 50 doz. Eggs @ 

25c. ; 105 lbs. Butter @ 30c. 

(26) Bought of Iowa Produce Co., on account: 100 boxes 

Gano Apples @ $2.50; 100 boxes Mo. Pippins @ 
$2.25; 50 boxes Winesaps @ $3.50; 25 crates Pine- 
apples @ $1.75. Paid Freight on above, $11.30. 

(27) Prepaid our note in favor of Wm. Hayward & Co., 

given June 2, for which they allow a discount of 6 
per cent, to maturity — 35 days. (Dr. Bills Pay- 
able; Cr. Cash and Discount.) 

(29) Sold to H. E. Johnson, 27 Canal St., on account: 25 

doz. Eggs @ 25c. ; 50 lbs. Cheese @ 17c. 

(30) Credit each partner with his salary as per articles of 

copartnership. (Dr. Expense; Cr. each partner.) 
Paid monthly dues and expenses as follows: Tele- 
phone Rental, $3.00; Commercial Club, $5.00; Pay 
Rolls for June, $150.00; Water Rent, $4.00. (Dr. 
Expense; Cr. Cash, four checks.) 

Now add all the columns of the Journal and see if the sum 
of the two debit columns equals the sum of the two credit 
columns. The cash balance should be $1,938.67. 



LESSON 17 
POSTING 

I. General Instructions. 

As explained on page 72, posting consists of transferring 
debits and credits from other books into the Ledger. The left 
half of the Ledger page is devoted to the debits and the right 
half to the credits. Every amount found in the Journal debit 
columns must be found on the debit side of the Ledger (either 
in individual items, or in totals) under the appropriate ac- 
count; and all credit items in the Journal must be found on 
the credit side of the Ledger. It is, therefore, evident that 
since the Journal balances, the Ledger will also balance, if the 
work is correct. 



82 



FARM ACCOUNTING 




DOUBLE ENTRY LEDGER 



DOUBLE ENTRY 83 

II. Written Work. 

1. Study very carefully page 82 and note how the titles 
are written. Note that the cash items in the Journal are 
not posted separately, but only the totals at the end of the 
month. 

2. Take three sheets of Ledger paper and number the 
pages from 1 to 6. On the first page give one fifth page to 
each of Student, Edward Harvey, Cash, Real Estate, and Fur- 
niture and Fixtures; page 2, give equal space to Grain and 
Feed, and Produce; page 3, equal space to Bills Receivable, 
Bills Payable, Expense, Freight, Interest and Discount; pages 
4 to 6, one fifth page to each personal account as they occur. 

3. You are now ready to post. Place the Ledger to your 
right and the Journal to your left. Turn to Student's account 
and in the date column write July 1, 1910; in the folio column, 
1 (meaning that the entry is found on page 1 in the Journal) ; 
in the amount column, $3,000.00. Now write 1 to the left of 
your name in the Journal, indicating that the amount is 
posted on the first page of the Ledger. This is very impor- 
tant. Next turn to Edward Harvey and post this item in the 
same manner. In the same way proceed with all the credit 
items. The last item to be posted is the total credit of cash, 
$5,016.45, under June 30. The numbers in the folio columns 
will be the same until new pages are turned. The number 
opposite the entry in the Journal is always the page of the 
Ledger on which the account appears. Add the totals of the 
Ledger accounts and observe that the grand total equals 
the total of the credit columns of the Journal. 

4. Proceed in exactly the same manner with posting the 
debit entries and prove your work the same as the credits. 
If the debit and credit postings are equal, your work is prob- 
ably correct, though amounts may have been posted to the 
wrong account. Such errors could not be detected except by 
checking. 

5. Observe tlT.at several accounts balance, such as Horton, 
Brown & Co., Willard Johnson, and others. Draw a red line 
across the money columns under the last amount on both sides 
of all accounts which balance. Accounts having a number of 
entries on either or both sides should be totaled and the 



84 FARM ACCOUNTING 

amount written under the respective columns in very light 
pencil figures. You are now ready to take the trial balance. 

LESSON 18 
THE TRIAL BALANCE 

I. General Instructions. 

The trial balance is taken for the purpose of discovering 
whether the Ledger is in balance or not; that is, if the debits 
equal the credits. It may be taken either by using the totals 
of the debits and credits of each Ledger account or by taking 
the difference between the two sides. The latter method has 
several advantages. Both methods should be used if there is 
any difficulty in getting the balance. The only satisfactory 
rule for discovering errors in the trial balance is the follow- 
ing: Check all the work. 

n. Written Work. 

Take a sheet of Journal paper and write the page, title, 
and balance of all the accounts in the Ledger, except those 
which balance, as follows : — 

TRIAL BALA^XE, JUNE 30, 1910 

1 Student ? 

1 Edvv^ard Harvey ?■ 

1 Cash ? 

1 Real Estate . , ? 

etc., etc 

Total $7,913.38 $7,913.38 

LESSON 19 
THE BALANCE SHEET 

L Gefieral Instructioiis. 

The balance sheet consists of two statements: one showing 
the losses and gains, the other showing the resources and 
liabilities. These statements consist of the items found in 
the trial balance and of the inventories. Having completed 
the trial balance and inventories, the books are not needed 
further in preparing the balance sheet. Losses or gains are 



DOUBLE ENTRY 85 

generally found in accounts of allowances and property in 
which we deal, or which show a rise or fall in value ; resources 
and liabilities are generally found in accounts representing 
property and persons. Resources appear on the debit side; 
liabilities and gains, on the credit side. 

II. Written Work. 

1. The first step is to take an inventory. This consists of 
property on hand, including Grain and Feed, Produce, Fur- 
niture and Fixtures, and Real Estate. Going through the 
stock we find : — 

GRAIN AND FEED PRODUCE 

748 bu. Corn @ 69c. 435 doz. Eggs @ 21c. 

115 bu. Barley @ 51c. 95 lbs. Butter @ 27{rC. 

497 bu. Wheat @ 97c. 50 lbs. Cheese @ 15c. 

10 tons Prairie Hay @ $12.00 25 crates Pineapples @ $1.75 

100 boxes Ganos @ $2.50 
100 boxes Pippins @ $2.25 
50 boxes Winesaps @ $3.50 

Real Estate and Office Fixtures at cost value. Prepare tha 
inventory as illustrated on page 20. 

2. Going through the trial balance we find that the fol- 
lowing accounts represent losses or gains (fill in the 
amounts) : — 

■ LOSSES AND GAINS 

Expense ? Grain and Feed (2) . ? 

Freight ? Produce (2) ? 

Student (1) ? Int. and Discount. . . ? 

Harvey (1) ? 

Total ? Total ? 



(1) The difference between the two sides, usually written in 
red ink; (2) is found by subtracting the amount in the trial 
balance from the inventory. 

3. Since the loss and gain account is made up only at the 
end of the balance period, it should always be closed and the 
balance transferred to the proprietor's accounts. 



86 FARM ACCOUNTING 

4. The resources and liabilities are as follows (insert the 
figures and total) : — 



RESOURCES 


A^^D LIABILITIES 


Cash 


? 


Robert Morris 


Real Estate 


? 


Henry Simmons Co. . 


Fur. and Fixtures. . 


? 


Western Produce Co. 


Grain and Feed (In- 




Bills Payable 


ventory) 


? 


Iowa Produce Co. . . . 


Produce (Inventory) 


? 


Student 


Bills Receivable .... 


? 


Edward Harvey. . . . 


Chicago Milling Co. . 


? 




Empire Livery 


? 




Hotel Emery 


? 




H. E. Johnson 


? 





Total $7,964.01 Total $7,964.01 



LESSON 20 
CLOSING THE LEDGER 

I. General Instructions. 

The object of closing the Ledger is to balance the loss and 
gain accounts and to bring the final net gain or net loss into 
the partners' accounts and thus leave only the accounts show- 
ing resources and liabilities open for the next balance period. 
The balance sheet furnishes a perfect guide as to the accounts 
to be closed. All the accounts represented in the loss and 
gain statement must be closed. Accounts showing resources 
and liabilities are not closed, but any account may be balanced 
if it contains a sufficient number of entries to justify it. Bal- 
ancing an account consists of canceling' equal amounts from 
both sides of the account, ruling it, and bringing down the 
balance on the proper side below the ruling. 

II, Written Work. 

With the balance sheet before you, turn to the Grain and 
Feed account in the Ledger. Enter the inV-entory on the 



DOUBLE ENTRY 87 

credit side, as illustrated on page 82. The difference between 
the diebits and credits is now $537.60, or the gain on this 
branch of the business. Enter this on the smaller, or debit, 
side, then rule the account as illustrated on page 82. (The 
ruling may be done in red or black ink as desired.) Note that 
the ruling appears on the same blue line on both sides of the 
account, even if there are more entries on one side than on 
the other. The single line crosses the money column only; 
the double line crosses all except the explanation columns. 
Next bring down the inventory on the debit side below the 
ruling. The reason for this is that having entered it on the 
credit side temporarily, in order to show the proper gain, it 
must also be entered on the debit side in order to restore the 
balance of the Ledger. Proceed in the same manner with the 
remaining loss and gain accounts, except that where there is 
no inventory the account is closed as it stands in the Ledger. 
Next enter half of the net gain, shown in the loss and gain 
statement, on the credit side of each partner's account. Close 
the account as illustrated on page 82 and bring down the 
present worth. This completes closing the Ledger. 

Note carefully the steps leading up to closing a set of 
books : — 

1. The trial balance. 

2. The balance sheet. 

3. Closing the Ledger. 

Never rule an account until the trial balance and balance 
sheet are known to be correct. 

LESSON 21 (Optional) 
ORIGINAL ENTRY LEDGER 

L General Instructions. 

It was stated on page 76 that it is not necessary to jour- 
nalize, but that it is very helpful in order to avoid mistakes. 
Most business men prefer the Journal and Cash Book for the 
original entries. The difficult thing to carry out in practice 
without journalizing is to post every entry tivice, on both the 
debit and the credit sides. Thus, when a sale of grain is made 



88 FARM ACCOUNTING 

for cash, cash is debited and grain is credited, according to 
the rules of journalizing. Since the full explanation is writ- 
ten in the Ledger, it is best to use the ordinary Day Book 
form as illustrated on page 22 and used in Lesson 3. 

11. Written Work. 

On two-column Journal paper open the same accounts as in 
Lesson 3 and post the transactions in Lesson 16 directly into 
the accounts, as illustrated on page 22. The result will be 
exactly the same as given in Lesson 17. It will, therefore, be 
unnecessary for you to prepare the statements and close the 
Ledger. The trial balance must be taken, however, same as 
heretofore. 



PART II 

COST ACCOUNTS AND SPECIAL RECORDS 



COST ACCOUNTS AND SPECIAL RECORDS 



CHAPTER VI 

COST OF PRODUCTION 

Too often a good farm is compelled to carry unprofitable 
experiments and the whole business is pronounced a failure 
without an adequate attempt to find a remedy. In addition to 
the foregoing records (Second Method), Mr. Harris has kept 
accurate cost accounts of the main branches of his business. 
In cost accounting there are four principal elements to con- 
sider: Cost of material, labor, interest, and depreciation. 
The cost records are independent of all the rest and may be 
kept of every branch of the business, if desired, or limited to 
one or more phases. In this instance cost records have been 
kept of live stock, grain, hay, dairy products, and improve- 
ments. The Agricultural Experiment Stations are always 
willing to give the farmer important advice and assistance 
regarding the stock, grain, fruit, etc., best adapted for differ- 
ent localities and purposes. But conditions frequently arise 
where it is important for the farmer to carry on his own 
experiments. Your own Experiment Station will doubtless 
be glad to cooperate and suggest methods for carrying on such 
experiments even to the extent of furnishing necessary blanks 
and material. Important bulletins on the subject may be had 
for the asking from the Department of Agriculture, Wash- 
ington, D. C. 

The following announcement in the Crop Reporter for May, 
1908, indicates what the government is doing in this direc- 
tion : — 

" Cost of Producing Farm Products " 

"The Bureau of Statistics is making an investigation of the 
cost of producing farm products in different parts of the 
United States. Blank forms have been printed upon which 

(91) 



92 COST ACCOUNTS AND SPECIAL RECORDS 

to make reports, and this Bureau desires to receive the names 
of such farmers as have kept records of cost of producing 
crops, or are well informed upon the subject of cost of crop 
production in their locality, in order that blank schedules may 
be sent to them to fill in. Individual reports will not be pub- 
lished — only the average of many reports. Names should be 
sent to the Bureau of Statistics, Department of Agriculture, 
Washington, D. C." 

Every farmer should avail himself of this important free 
service. "Keeping posted" is one of the characteristics of 
the progressive and successful farmer. There are three ex- 
ceptionally valuable bulletins on the subject which ought to 
be in the library of every farmer : U. S. Department of Agri- 
culture, Bureau of Statistics, Bulletin No. 48, and University 
of Minnesota, Agr. Ex. Station, Bulletins Nos. 73 and 97. 

Goat of Live Stock 

Either of three methods may be employed in finding the cost 
of live stock: — 

First Method. — Ascertain exactly the total amount of grain, 
hay, and roughage on hand at the beginning of the year, and 
produced during the year. From this subtract the quantity 
sold, including amount used by household and for seed, and 
the amount on hand at the end of the year. The difference is 
the quantity used for live stock. The value at market prices 
is the expenditures of feed for live stock. 

Find the total amount received for dairy products, including 
amount used by the household. The difference between the 
cost and the receipts is the gain. The disadvantages of this 
method are that no account is taken of individual animals nor 
of different kinds of stock. The herd as a whole may be a 
paying investment and still there may be individual animals 
carried at a loss. It is desirable that such records be kept, at 
least occasionally, as will enable the farmer to eliminate un- 
profitable animals. 

Second Method. — The following actual record of a dairy 
herd of twelve cows illustrates a much more satisfactory test 
than the preceding. Individual record was kept of the milk 
produced by each cow, but the feed was weighed for the 



COST OF PRODUCTION 93 

entire herd, and the average cost charged to each animal at 
market prices. 

Tests of Dairy Herd for March, 1909 

No. Lbs. Milk 

Cow. for Mo. *Test. Lbs. Fat. Val. at 36c. Cost of Feed. Net Profit. 

1 465 4.5 20.93 $7.53 $6.21 $1.32 

2 372 5.0 18.60 6.70 6.21 .49 

3 620 5.0 31.00 11.16 6.21 4.95 

4 372 7.0 26.04 9.37 6.21 3.16 

5 496 4.8 23.80 8.57 6.21 2.36 



6 


682 


4.7 


32.05 


11.54 


6.21 


5.33 


7 


558 


4.4 


24.55 


8.44 


6.21 


2.23 


8 


620 


4.1 


25.42 


9.15 


6.21 


2.94 


9 


496 


4.2 


20.83 


7.50 


6.21 


1.29 


10 


651 


4.9 


31.90 


11.48 


6.21 


5.27 


11 


558 


5.0 


27.90 


10.04 


6.21 


3.83 


12 


589 


5.0 


29.45 


10.60 


6.21 


4.39 



* These figures were obtained by the Babcoek test, which is described in every modern 
work on dairying. It may be seen in any creamery. 

Feed for the Month of March 

Hay, 4,900 lbs. @ $9.00 per ton $22.05 

Kale, 9,600 lbs. @ $2.50 per ton 12.00 

Bran, 1,800 lbs. @ $30.00 per ton 27.00 

Shorts, 900 lbs. @ $30.00 per ton 13.50 

Total $74.55 

$74.55 divided by 12 equals $6.21, average cost of feed. 

With this average before him, a careful feeder will be able 
to make mental corrections for each individual animal, accu- 
rate enough for most practical purposes. The milk record has 
been kept, as illustrated on page 102. 

Third Method. — The difference between the second and third 
methods is that in the latter accurate records are kept of indi- 
vidual feed rations, while in the second method an average is 
taken. The error resulting from averaging the feed between 
all the animals in a large herd may be such as to unduly favor 
certain animals and do injustice to others. The only abso- 
lutely accurate method is to keep an account with each animal, 



94 COST ACCOUNTS AND SPECIAL RECORDS 

at least with such annuals as show a tendency to be unprofit- 
able. Page 97 shows an individual account with one of the 
milch cows on the Harris farm. It is arranged on the regular 
Ledger form. Opposite pages of the Day Book may also be 
used. The detailed information regarding feed, milk, labor, 
etc., is found in the respective records, illustrated on pages 
102 and 103. Similar accounts are kept of each animal, 
tested preferably during the entire lactation period. It is 
only in this way that the careful farmer can determine 
whether each animal is kept at a gain or a loss. The weeding 
out of one or two unprofitable animals a year will pay for the 
labor of keeping the cost records many times over. 

Extension Bulletin No. 3, Iowa State College, says on this 
subject: — 

"There are a variety of different methods used among suc- 
cessful dairymen for securing records of their cows. When 
accurate records are imperative it is necessary to weigh and 
sample each cow's milk at each milking. For all practical 
purposes, however, it is not necessary to weigh and sample the 
milk from each cow of tener than twice a day for three days of 
each month. Usually samples are taken on the first, tenth, 
and twentieth of each month, thereby making six milk weights 
on the record sheet and six separate samples of milk which 
have been placed in a sealed jar bearing the cow's name. 

"Directions. 

"1. Arrange the scales, milk sheet, sample jars, and 
sampler in a convenient place behind the cow stalls. 

"2. Put at least one preservative tablet in each jar in- 
tended for a composite sample. Be sure to place the remain- 
ing tablets where children cannot get them, as they are 
poisonous. 

"3. Weigh the milk from each cow separately and record 
the amount on the record sheet. 

"4. Use a reliable sampler, or if one is not at hand use care 
in mixing the milk by pouring from pail to pail before taking 
out a sample with a small dipper. This is important. 



COST OB^ PRODUCTION 



95 



"5. Keep the bottles where the children cannot get at them, 
as the preservative is poisonous. 




"COMPUTING THE MONTHLY YIELD FOR A COW 

"After summing up the weights of milk from one cow for 
the three days of the month you have the total pounds of milk 
for an average three days. Divide the sum by 3 and you have 
the average for one day, which multiplied by the number of 
days in the month will give the monthly yield. It is not ex- 
pected, nor is it essential, that these records be accurate to a 
pound in ordinary dairy herds. When the milk is tested with 
the Babcock machine the result is read as per cent, of butter 
fat, — as 3.7 per cent, or 4.3 per cent. This indicates that there 
are 3.7 pounds or 4.3 pounds of butter fat in 100 pounds of 
milk. Multiplying the weight of the cow's milk for the month 
by the test the result indicates the pounds of butter fat which 
the cow has produced for the month. At the end of the year 



96 COST ACCOUNTS AND SPECIAL RECORDS 

it is a simple matter to add together the twelve monthly 
records of butter fat. Multiply the sum of these weights by 
the price per pound and the result indicates the value of the 
product. The record for each member of the herd can be thus 
worked out. A study of these records shows the comparative 
value of the various cows in the herd. 

"In order to know whether the cow is paying a profit or not 
the owner must have a definite idea of how much feed she has 
consumed in making this product. Knowing this, the actual 
values of all the cows are easily determined. On dairy farms 
where the hand separator is used it is safe to charge a cow for 
food only while in milk. The skim milk will usually pay for 
the cow's board while dry, and the calf and manure should 
more than pay for the labor it takes to care for her. Why not 
milk fewer cows and make more money?" 

Cost of Crops 

The principles laid down in respect to the cost of animal 
products hold true also for the cost of farm crops. Two meth- 
ods suggest themselves : Accounts with the various crops and 
accounts with the different fields. Either method requires de- 
tailed records of the labor, seed, fertilizer, etc., expended on 
the crop and of returns not only for cash sales, but for prod- 
ucts used by the household and for feed. On page 97 is 
illustrated an account with the wheat crop in 1908. 



COST OF PRODUCTION 



97 



/^^t.^'i^ ^M-g.^^ <S«<^y 




COST ACCOUNTS 



CHAPTER VII 

SPECIAL COST RECORDS 

There are several convenient special records which ought to 
be adopted besides those I have illustrated. It is not neces- 
sary that expensive printed books be provided. A plain sheet 
of paper may be ruled with little trouble and pasted in the 
Bill File. In fact, this is in many respects preferable to 
printed forms, because the forms can then be changed from 
year to year to suit conditions. I illustrate only the follow- 
ing:^ 

Labor Records 

The best form of a labor record is illustrated on pages 102 
and 104. In one, account is kept with the object upon which 
labor is expended; in the other, with the laborer. For ordi- 
nary purposes, page 102 is the most convenient, but where 
several men are engaged on a project Form (a), page 104, is 
preferable. 

Milk Records 

Two milk records are illustrated on pages 102 and 104. Each 
possesses certain advantages over the other. The weekly rec- 
ord need not be so large and admits of larger spaces, while the 
monthly record exhibits the entire month's result on a single 
page. The weekly record is more appropriate for filing, being 
less liable to soiling. Whichever form is used, it should be 
tacked to a board in a convenient place for the milker. A 
spring scale, graduated to hundredths, should be hung near 
the record, far enough from the wall for the pail to hang 
freely. (See illustration, page 95.) The original records 
should be filed for at least a year. If a daily time book is kept, 
it may also be adapted for the milk and poultry records. 

Poultry Records 

Practically the same form as the milk record can be used 
conveniently for the egg record, and it is not deemed necessary 
to enlarge further on the subject. 

(98) 



SPECIAL COST RECORDS 99 

The methods of improving the poultry stock, and other use- 
ful information regarding the poultry business, are found in 
numerous books and bulletins on the subject. 

Duplicating Sales Sook 

It is often convenient to retain a duplicate of sales, orders, 
receipts, etc. It will be found very helpful to the farmer and 
to the dealer alike, if the farmer prepares a bill of the produce 
he brings into town for sale. This will often avoid misun- 
derstanding, and may save money. This is especially true if 
the produce is sent in by children or by some one not connected 
with the family. On page 104 is illustrated a very convenient 
book which is kept in stock in most stationery stores. Where 
this system is used, it is advisable that every sale be recorded, 
and then listed as shown on page 103. In entering in the Cash 
Book, the sale number should be inserted. All sales to mer- 
chants should be considered as cash, even if the produce is 
exchanged for merchandise. If sales are made on time, note 
the fact on the bill, and enter it into the personal account, as 
illustrated on page 22. 

The Farm Plot 

There is one more record which I cannot urge too strongly. 
I refer to the yearly plots. This record will prove to be one 
of the most valuable and interesting parts of the farm history. 
A plot is easily made by first drawing a square on a blank 
piece of paper and then sketching the fields. It is, of course, 
unnecessary to draw this to scale. A close approximation is 
all that is necessary. (See the illustration, page 105.) 

A Practical Work Report 

The excellent work report shown on page 101 is used on the 
Beachview Farm, operated by Griffiths & Sons of Seattle, T 
quote from their letter on the subject: — 

"Our trouble has been to arrive at some satisfactory method 
of obtaining the cost of production of the various crops and 
kinds of stock. We are attempting to solve this in two 
ways : — 

"First, as to labor, by the weekly work report which the 



100 COST ACCOUNTS AND SPECIAL RECORDS 

foreman is instructed to fill out, one for each man on the 
place, by quarters of a day. The bookkeeper can then appor- 
tion the operating expenses, including labor, to the various 
accounts. 

"Second, we have found it more difficult to apportion the 
produce raised on the farm to the various stock accounts. 
This can be done without much difficulty with the grain, but 
with the hay, for instance, when cattle and horses are fed in 
the same barn, from the same loft, but by different men, it is 
a difficult matter to charge the various stock departments 
with the amount used to even an approximation of correct- 
ness." (See page 101.) 

Office Methods 

Talk about office methods on the farm! Why not? Why 
should not the average farmer enjoy at least a comfortable 
desk and neatly printed stationery? Every boy loves "to do 
business." Surround him with a business atmosphere on 
the homestead and he will stay by you and succeed you in 
your old age; continue in your slipshod methods and he will 
move to town and become a cheap clerk instead of a landed pro- 
prietor. Encourage your children to assist in your business ; 
make them feel that they are intimately associated with you. 
Take them into your confidence and, as they grow older, into 
your counsel, especially when you are considering your annual 
balance sheet, and a greater prosperity, wider influence, and 
a more contented family will be your reward. 



SPECIAL COST RECORDS 



101 



BEACHVISff J^^ "• 
WoT)t Raport, Waat Endl nr, (^OjD^i*^^ /C^ 19 10 . 


- /^ 




Account 


Mon. 


Tue. 


Wed. 


Thu. 


Fri. 


Sat. 


Total 


Rem arks 


Ct6p3, Roots 


/x 












/ 


Cu^ccZc^ti^ f 


Crops, Grain 


X 


Jx 






z 




7 


// -^ 


Crops, Hay 






y. 








// 


J/a^*'^*^ 


Cattle 


I 












/ 


J 


Hogs 


















Horsos 




/ 










/ 




Poultry 










/ 




/ 




Criniing Faod 










/ 




/ 




Manure 








z 






Z 




Land Clearing 


















Ditching 


















Vonoos, New 












J 


il 




Voncos, Rap. 


















Repairs to Bldg. 








z 






1 




Wood 


















Hauling to town 


















Harvesting 


















Filling Silo 


















Haying 




















To 


tal 








« 


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X '^Zccc-^.-^^ ^ 


'^^ ^ 


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V 


da^ 




/ / 




/ 















WORK REPORT 



102 



COST ACCOUNTS AND SPECIAL RECORDS 



MILK RECORD 



Week ending 



I9«?f 



Test 


NAMES 


Sunday 


Monday 


Tuesday u* 


Wednesday 


Thursday 


Friday 


Saiurday 


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■iTid of Slocic J^ViiW' L-rzi'-o 



SPECIAL COST RECORDS 

FEED RECORD 



103 



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10O. 



NAME OR NUMB 



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SPECIAL RECORDS 



104 



COST ACCOUNTS AND SPECIAL RECORDS 





^ xyj^firo^/e/rri'*ffS , /rone <Ait-*i ' ^^ 






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TIME BOOK for the " , '^ >(^nth of„jL^^:__t9^f 


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TIME AND SALES BOOK 



SPECIAL COST RECORDS 



105 



//of o/ r/ctrns' /ur/^ /yog 




THE FARM PLOT 



100 COST ACCOUNTS AND SPECIAL RECORDS 

Illustrative Lessons 

LESSON 22 
MILK RECORD 

I. General Instructions. 

The milk record illustrated on page 102, Form 10, is kept 
for the purpose of ascertaining the profitable and unprofitable 
cows. As explained on page 94, it need not be a continuous 
record, but should be kept for a week or a month whenever 
the information is desired. It is very important, however, 
that this **weeding-out" process be performed regularly once 
a year. The success or failure of the dairy farmer is likely 
to depend, to a very large extent, on this practice. Let us 
take for illustration a herd of fifteen cows. Form 10 is tacked 
to a" board and hung in a convenient place in the barn. A 
spring balance, graduated to tenths of pounds, is suspended 
near the record, as illustrated on page 95. 

II. Written Work. 

Following is the record of a mixed herd for the week ending 
June 5, 1909, representing an actual Oregon herd. The fig- 
ures in the first column under each day represent the morning 
milking; those in the second, the evening. Record the follow- 
ing data on Form 10 : — 

Sun. Mon. Tues. Wed. Thur. Fri. Sat. Test. 



Kate, 


12-10 


12-11 


10-13 


11-13 


12-11 


11-12 


12-12 


4.5 


Anthia, 


13-13 


13-14 


12-13 


12-13 


14-13 


14-12 


13-11 


5.0 


Digit, 


7- 8 


8- 7 


8- 9 


8- 8 


10- 8 


10- 8 


9- 9 


7.0 


Lady, 


12-11 


10-11 


10-12 


10-11 


11-10 


12-11 


11-11 


4.8 


Beauty, 


11-11 


11-10 


11-13 


14-12 


12-11 


12-12 


13-11 


4.7 


Glenco, 


12-13 


11-12 


11-12 


10-12 


10-11 


11-11 


12-10 


4.4 


Pet, 


12-10 


11-10 


13-12 


12-11 


11-12 


13-12 


12-11 


5.1 


Bess, 


10-11 


11-11 


10-12 


11-10 


11-12 


11-10 


11-12 


4.6 


Cynthia, 


12-13 


11-12 


12-11 


12-12 


11-12 


13-12 


11-11 


4.9 


May, 


9-10 


10-10 


10- 9 


9- 9 


9-11 


11-10 


10- 9 


5.4 


Gertie, 


10-11 


10- 9 


10-12 


10-10 


9-10 


11-12 


11-10 


5.8 


Alta, 


12-12 


13-14 


13-12 


14-13 


13-13 


12-13 


13-14 


4.7 


Ruby, 


8- 9 


7- 9 


8- 9 


7- 8 


8- 8 


9- 9 


9-10 


6.2 


Pauline, 


14-15 


14-14 


14-13 


14-15 


15-15 


14-15 


15-15 


4.3 


Princess, 


16-17 


16-16 


17-18 


17-17 


16-17 


16-18 


17-17 


4.4 



SPECIAL COST RECORDS 107 

Find from the record : — 

1. The total weight of milk. 

2. The total weight of butter fat. 

3. The weekly income from each cow, assuming that but- 
ter fat is worth 31c. per lb. and skimmed milk 25c. per cwt., 
allowing 10 per cent, for loss of weight in skimmed milk. 

4. The gain per cow based on the feeding record, Lesson 
23, Form 9. 

5. How can the result in (3) be proved correct? 



LESSON 23 
FEED RECORD 

I. General Insti^uctions. 

The feeding record, page 102, Form 9, is a companion to the 
milk record. Lesson 22. One is not kept without the other. 
Both are kept for the purpose of checking up the profits 
of the dairy cows. Three methods are fully discussed on 
pages 92 and 93. This and the preceding lessons have refer- 
ence to the third method. Suppose that Form 9 is tacked to 
a board and hung in a convenient place in the dairy barn. 
Below is the feed record of the herd in the last lesson. 

IL Written Work. 

Enter the following results in the respective columns. Only 
the last six cows were fed hay. 

Kate, weight, 800 lbs. ; Sunday, grain, 4 lbs. ; soiling, 64 lbs. ; 
Monday, 4-63 ; Tuesday, 3^-63 ; Wednesday, 4-65 ; Thurs- 
day, 4^-64 ; Friday, 3.1-62 ; Saturday, 4-64. 

Anthia, 975 lbs.; 8-80, 8-80, 8-80, 8-80, 7-80, 7-82, 7-81. 

Digit, 1,460 lbs.; 6-92 daily. 

Lady, 1,120 lbs. ; 8-90 daily. 

Beauty, 830 lbs. ; 4-68 daily. 

Glenco, 1,440 lbs.; 6-100, 6-110, 6-110, 6-100, 6-100, 6-100, 
6-110. 

Pet, 950 lbs. ; 7-80 Sunday, Monday, Tuesday • 7-83 Wednes- 
day, Thursday, Friday, Saturday. 

Bess, 1,000 lbs. ; 6-86 daily. 



108 COST ACCOUNTS AND SPECIAL RECORDS 

Cynthia, 1,270 lbs. ; 8-100 daily. 

May, 850 lbs.; 5-65 Sunday, Monday, Tuesday, Wednesday; 

4-60 Thursday, Friday, Saturday. 
Gertie, 900 lbs. ; 6-70 daily. 
Alta, 1,375 lbs. ; 8-100 daily. 
Ruby, 1,050 lbs.; 24 lbs. hay, 4^ grain, 42 soiling; 25-4-43, 

23-5-45, 24-41-44, 25-4-43, 25-41-45, 23-5-43. 
Pauline, 1,300 lbs. ; 27-6-45 daily. 
Princess, 1,350 lbs.; 30-7-48 daily. 

Find from the record : — 

1. The total feed per cow and enter the result in the 
proper column. 

2. The weekly cost per cow when the grain mixture is 
worth 95c. per cwt., soiling $1.05 per ton, and hay $10.50 
per ton. 

3. What changes should be made in the herd? 



LESSON 24 

LABOR RECORD 

I. General Instructions. 

As explained on page 98, a labor record may be prepared 
monthly or weekly. The monthly form, illustrated on page 
102, has many advantages. In the first column may be listed 
either the various accounts to which the labor is to be charged, 
as in this exercise, or a sheet may be devoted to each account 
and the names of the laborers listed in the first column. The 
latter plan is preferable in large enterprises. Sundays fall on 
May 6, 13, 20, and 27. Mark "S." above those dates and 
avoid placing any figures in the Sunday columns. 

II. Written Work. 

1. On Form 6 prepare the following pay roll for the month 
of May, 1910, as illustrated on page 102 : — 

Labor on Corn, Man and Team, May 7, 8, 9, and 10, 9 hrs. 
each @ 30c. per hour. 



SPECIAL COST RECORDS 109 

Live stock, Man and Team, 18, 4 hrs. ; 28, 8 hrs. @ 30c. per 

hour. 
Orchard, 3, 3 hrg. ; 14, 2 hrs. ; 23, 1 hr. @ 15c. per hour. 
Improvements, 7, 4 hrs.; 12, 4 hrs.; 19, 3 hrs.; 25, 2 hrs. @ 

15c. per hour. 
Machinery and Implements, 1, 1 hr. ; 5, 2 hrs.; 15, 1 hr. ; 22, 

3 hrs. @ 15c. per hour. 
Wheat, 4 and 5, 9 hrs. each ; 16 and 17, 9 hrs. each, Man and 

Team, @ 30c. per hour. 
Onions, 1 and 2, 9 hrs. each; 11, 6 hrs. @ 15c. per hour. 
Potatoes, 21, 9 hrs. ; 24, 6 hrs. ; 25, 5 hrs., Man and Team, @ 

30c. per hour. 
Hay, 11, 3 hrs.; 14, 6 hrs.; 15, 4 hrs.; 18, 3 hrs., Man and 

Team, @ 30c. per hour. 
Oats, 26, 29, and 30, 9 hrs. each ; 31, 7 hrs., Man and Team, @ 

30c. per hour. 

2. Add the number of hours under each account and enter 
in the hour columns. 

3. Find the amount under each account, and, finally, the 
total labor. 



LESSON 25 
THE FARM PLOT 

Read the suggestions regarding the farm plot on page 99. 
On Form 11 draw to scale any farm with which you are 
acquainted, preferably your own farm, if you own one. Lay 
out the various fields and mark the crop and the acreage, as 
shown on page 105. Draw it first in lead pencil, then in ink. 

Supplementary Exercises (Optional) 

1. THE INVESTMENT 

The census for 1900 gives the following apportionment for 
land and improvements, buildings, implements, machinery, 
and live stock for every $10,000.00 invested : — 



110 COST ACCOUNTS AND SPECIAL RECORDS 



Division. 

N. Atlantic States. 
S. Atlantic States. 
N. Central States . . 
S. Central States. . 
Western States . . . 



Total. 


Land 
and Impr. 


Buildings. 


Imp. 
and Mach. 


Live Stk. 


$10,000 


$5,737 


$2,567 


$606 


$1,090 


10,000 


6,661 


2,720 


332 


1,362 


10,000 


6,055 


825 


500 


2,620 


10,000 


4,114 


1,114 


373 


4,356 


10,000 


4,463 


693 


593 


4,251 



Total $50,000 $27,030 $7,919 $2,404 $13,679 



Average $10,000 $5,406 $1,584 $481 $2,736 

Compare the above with two or more typical farms with 
which you are acquainted. 

2. PRIVATE ACCOUNTS 

The student will find it a valuable exercise to keep account 
of his personal receipts and expenditures on a form similar to 
No. 2. The columns may be headed as follows: Receipts — 
Earnings, From Home; Payments — Fees (Books and Sta- 
tionery), Board, Room, Clothing, Recreation. A semester's 
record of the student's actual expenses will be given special 
credit. Whether submitted for credit or not, all students are 
urged to keep an accurate record of their personal expenses. 

3. AGRICULTURAL STATISTICS 

It is desired to obtain accurate data on farm management, 
and you are required to write to two or more farmer friends 
for certain information. Copies of a letter will be furnished 
by your teacher. (A copy of the proposed letter will be fur- 
nished any teacher by the author.) Tabulate the result and 
prepare a report to be discussed by the class. 

4. COST RECORDS OF CROPS 

As illustrated on page 97, prepare a cost record, showing the 
net profit or loss of two crops, from information secured from 
reliable sources. Any local crop may be taken, such as pota- 
toes, wheat, oats, hay, etc. Two months will be allowed for 
the work. 



SPECIAL COST RECORDS 111 

Hand in your work with a letter of explanation of the 
system. 

5. COST RECORDS OF STOCK 

According to either the second or third method outlined on 
page 92, prepare a statement of the net profit or loss of not 
less than five milch cows. Your information may be drawn 
from any farm, from the college department of dairying, or 
from agricultural bulletins. The records required are : Labor, 
milk, feed record, and the individual Ledger account of each 
animal. Two months will be allowed for this work. Use 
Forms 1, 6, 9, and 10. 

Hand in your work with a letter of explanation of the 
system. 



PART III 



BUSINESS ORGANIZATIONS, 
CORRESPONDENCE, AND FORMS 



BUSINESS ORGANIZATIONS, 
CORRESPONDENCE, AND FORMS 



CHAPTER VIII 

BUSINESS ORGANIZATIONS 

The tendency of to-day in all important business enterprises 
is toward organization and cooperation. What would be im- 
possible for an individual to accomplish becomes a compara- 
tively easy task when the resources of a number of persons 
are combined. While no business organization should be 
effected without the assistance of competent legal counsel, it 
is important that the parties should understand the nature of 
the organization and the necessary steps required for their 
promotion and the form of contracts in common use. This is 
all that will be attempted in this chapter. The legal aspects 
of each organization must be studied under commercial law. 
The most important among business organizations are Part- 
nerships, Joint Stock Companies, and Corporations. 

Partnership 

Two or more individuals competent to make contracts under 
the law may combine their labor and capital in any lawful 
business enterprise. When this is done without any legal 
formality it is called a partnership. The agreement is called 
the Articles of Copartnership and should always be in writing 
and prepared by a competent attorney. Any name may be 
adopted which cannot be shown to cause an injury to another's 
business. Each partner is personally liable for all the debts of 
the partnership unless it is clearly held out before the public 
that another agreement exists between the partners. This 
liability extends to the personal property of each partner as 
well as to the partnership assets, — one of the subjects most 
often misunderstood by the layman. Nor does the liability 

(115) 



116 BUSINESS ORGANIZATIONS, CORRESPONDENCE, FORMS 

depend on the amount invested or the service rendered by each 
partner. So long as the business is solvent, the profits or 
losses are divided according to the articles of copartnership, 
but if the business fails and only one partner is able to pay, 
he is responsible for all the debts of the firm. 

Following is a standard form of articles of copartnership : — 

Articles of Copartnership 

This Agreement Witnesseth, That John Doe of Auburn, 
Illinois, and Edward Harvey of Auburn, Illinois, have this 
day agreed to associate themselves together as a copartnership, 
for the purpose of engaging in the business of buying and 
selling for profit Feed and Produce, at Auburn, Sangamon 
County, Illinois, under the firm name of Doe and Harvey, the 
term of said copartnership to continue five years from and 
after the first day of June, 1910, unless sooner dissolved. 

The investment contributed by the aforesaid partners is to 
be as herein set forth, to wit : John Doe contributes $3,000.00 
in cash, and Edward Harvey contributes $3,000.00 in cash. 

The profits or losses of said partnership business are to be 
shared equally. 

With respect to the time and services given, and the com- 
pensation to be received, it is agreed that both parties shall 
give their entire time to the business. John Doe shall be 
allowed a salary of One Hundred Dollars ($100.00) per 
month, and Edward Harvey Eighty Dollars ($80.00) per 
month, unless otherwise agreed between the parties. 

It is also agreed that aside from the profits and compensa- 
tions heretofore mentioned, neither partner is to withdraw 
from the business any money or other property, except with 
the written consent of the partners. 

It is especially agreed that neither of the parties to this 
contract shall sign or indorse any bank note, draft, or com- 
mercial paper, nor sign any official or other bond, nor do 
any other act to create a financial liability or obligation, with- 
out the written consent of his copartner. 

At the expiration or sooner determination of said copartner- 
ship, the business and property of said firm may be closed out 
by sale; and, after all debts and liabilities are paid and dis- 



BUSINESS ORGANIZATIONS 117 

charged, the amount remaining shall be divided between the 
partners in the ratio of their respective interests; or, if the 
parties so agree, the copartnership may be continued for such 
further time, and upon such terms, as the members thereof 
may be able to agree upon. 

Witness our hands this first day of June, 1910. 

WitTiP^s . f F. W. Brown, John Doe, 

witness. |g ^ Johnson, Edward H. 



Edward Harvey. 



EXERCISE 1 



Write articles of copartnership for any firm with which you 
may be acquainted, using the articles on page 116 as a model. 

Joint Stock Companies 

A joint stock company differs from a partnership in its 
organization and membership only, not in the liability of the 
members. Its organization is like the corporation; the lia- 
bility of its members and its formation are like the partner- 
ship. No legal steps are necessary to form a stock company. 
The capital is usually divided into shares like the corporation, 
and, in voting, a member of a stock company has but one vots 
regardless of his interest in the business, while in the corpora- 
tion the voting power depends on the amount of stock held. 
The stock company has power of succession, but has no seal. 
A suit must be conducted in the name of all the stockholders 
and not in the name of the company through its officers. 
The advantages of a stock company over a corporation are : 
(1) less formality in organization ; (2) less publicity; (3) not 
affected by the corporation tax; (4) no public reports re- 
quired. 

EXERCISE 2 

Write a paragraph pointing out how the Hood River Apple 
Growers' Union could be changed into a joint stock company.' 
(See Articles on page 119.) 

Corporations 

Because of its adaptability to a large variety of conditions, 
the corporation has become the favorite form of business 
organizations. Many corporations have stockholders in all 



118 BUSINESS ORGANIZATIONS, CORRESPONDENCE, FORMS 

parts of the world, but the organization is represented in its 
sphere of business and before the law by its officers and 
directors. Thus a corporation may be defined as an artificial 
person, created by law, either under special enactment or 
under general statute, to act as one person, through its officers, 
in its business capacity and before the law. 

The formation of a corporation should be thoroughly under- 
stood by every citizen, but it is extremely inadvisable to or- 
ganize without the assistance of a competent attorney. It is 
not safe to lay down many general rules governing the organi- 
zation of corporations, since the laws differ materially in the 
several states. Reliable information can be obtained free of 
cost from the Secretary of State in each state of the Union. 

The corporation differs from the partnership in several 
important respects. (1) It is created by law; that is, no 
corporation is recognized before the law unless it is organized 
exactly as set forth in the statutes of the various states. (2) 
The liability of the stockholder extends only to the amount of 
his stock, unless otherwise provided in the articles of associa- 
tion. (3) A corporation can sue and be sued in its own name 
through properly qualified officers. (4) It has the power of 
succession; that is, the organization is not affected by the 
death or disability of any stockholder. (5) The interest of a 
stockholder may be transferred without affecting the organi- 
zation. (6) The voting power of each stockholder is propor- 
tional to the amount of his stock. 

From a careful study of the constitution and by-laws given 
below, it will be seen that the articles of association must set 
forth (1) the intention of forming a corporation; (2) the 
corporate name; (3) the purpose of the organization; (4) 
the place of business; (5) election of officers; (6) powers 
and duties of officers; (7) amount and division of stock, etc. 

The advantages of the corporate organization are many and 
important. By it the cooperative spirit is fostered; in union 
is strength. The small means of a large number are collected 
and effective capital is secured for large enterprises ; members 
may enter or withdraw without disturbing the organization; 
through organization, special talents are utilized to best ad- 
vantage; waste of material, labor, and capital are reduced to 



BUSINESS ORGANIZATIONS 119 

a minimum; the publicity required by law has a wholesome 
influence against corruption and dishonesty. 

It is not out of place to give a word of caution to the unin- 
itiated in the subject. Schemers often promote corporations 
for fraudulent purposes and hide their own designs behind 
innocent stockholders. Do not rush into incorporating; a 
majority of the corporations formed are failures. If you 
wish control of the corporation, you should control at least 
fifty-one per cent, of the capital stock. 

Every stockholder should be provided with a copy of the 
constitution and by-laws and also with the annual report. 
See to it that the minutes of the board of directors and all 
books of account are carefully kept. Every stockholder has 
the right to inquire into the business methods of the corpora- 
tion. 

The legal aspects of stock issue, kind of stock, dividends, 
surplus, etc., are subjects for commercial law. 

The constitution and by-laws of the Hood River Fruit 
Growers' Union is given below as a model : — 

Constitution and By-Laws of the Hood River Apple Groovers' Union 

Article I 

The name, place of business, capital stock, and purposes of 
this corporation are set forth in the articles of incorporation, 
which are referred to as part of these by-laws. 

Article II 

The membership of this corporation shall be confined to 
actual growers of fruit of Hood River Valley and vicinity. 

Article III 

The board of directors ^hall consist of nine members, four 
of whom shall hold office for more than one year. They shall 
be elected annually and shall serve until their successors are 
elected and qualified. They shall qualify as directors within 
ten days after their election, and within ten days thereafter 
they shall elect from their number a president, vice-president, 
and secretary. They shall also choose a treasurer, who shall 
be required to give bonds, with surety in such sums as they 



120 BUSINESS ORGANIZATIONS, CORRESPONDENCE, FORMS 

may deem ample. They may choose a bank as treasurer with- 
out bonds. The annual meeting shall be held on the first 
Saturday in April in each year. 

Article IV 

The directors shall have the power to levy and collect 
assessments on the capital stock not to exceed fifty per centum 
of the stock subscribed at any one time and not oftener than 
every sixty days, the same to become delinquent in thirty days 
from date of notice of such assessment in the local newspaper. 
The directors shall sell shares of stock to actual fruit growers 
only. 

Article V 

The directors shall employ such agents or other employees 
as are necessary to do the business of the corporation, and 
shall fix their remuneration; provided, that the board of 
directors shall receive no salary for acting as directors. They 
shall have daily account sales rendered to the members of the 
union each day, as received by them or their agent, giving 
a statement by whom sold, gross sales, commission, freight, or 
express, and amount due members of the union; also giving 
condition of fruit, if there be any complaint. 

Article VI 

The directors may refuse to receive for shipment, under the 
brand of the union, any package of fruit not considered prime 
from any cause. They shall refuse to receive for shipment 
fruit from any person not holding stock. 

Article VII 

This organization through its board of directors shall have 
the exclusive and unqualified power to market all apples grown 
by any of its members. A contract between each member and 
the board will be required. 

Article VIII 

The duties of the secretary shall be to keep a record of the 
proceedings of the meetings of the stockholders and directors. 
He shall keep the corporate seal of the association and shall 



BUSINESS ORGANIZATIONS 121 

be custodian of all deeds, articles of agreement, and other 
valuable instruments of writing belonging to the association. 
He shall keep all books of the issuance and transfer of stock 
and shall countersign all certificates of stock and affix the 
seal of the board of directors and stockholders, and shall keep, 
or cause to be kept, all books of account necessary to the 
transaction of the general business of the association. The 
manager of the union shall be placed on a flat salary. 

Article IX 

The board of directors shall provide the necessary means 
for carrying out the purposes for which the association is 
formed by reasonable charges and commissions for the service 
rendered by the association to its members and customers. 

Article X 
The duties of the treasurer shall be to receive all moneys due 
or paid to the association and deposit the same as the direc- 
tors may instruct; to pay out said funds upon the written 
order or check of the president, first vice-president, or general 
manager, when countersigned by the secretary. 

Article XI 
All notes or other evidence of indebtedness of the associa- 
tion shall be signed by the president and countersigned by the 
secretary of the board of directors. 

Article XII 

The president shall instruct the secretary to call a meeting 
of the stockholders whenever in his judgment the necessities 
of the union require it, by giving one week's notice through 
the local newspaper and send each a notice on a postal card. 

Article XIII 
No union label shall be placed on a box of fruit except by 
the manager of the warehouse just before shipping. 

Article XIV 
Each packer will be held responsible for his own work by a 



122 BUSINESS ORGANIZATIONS, CORRESPONDENCE, FORMS 

system of fines. No fruit will be received unless put up by a 
packer employed by the union. 

Article XV 

The union will have no packing- house foremen except those 
employed by the union. 

Article XVI 
A majority of the stock subscribed, upon which all legal 
calls or assessments have been paid in full, shall constitute 
a quorum at any stockholders' meeting, and no vote shall be 
counted which is not represented by one share of the stock 
upon which all calls or assessments have been paid. 

Article XVII 

These by-laws may be amended by vote of the majority of 
the stock upon which all calls or assessments have been paid, 
at any regular or called meeting, provided that notice to 
amend the by-laws shall have been given in the call for a 
special meeting. 

Article XVIII 

Any member desiring to dissolve his connection with this 
corporation may do so by surrendering his stock to the secre- 
tary thereof or by transferring it to any member in good 
standing on the secretary's books. 



exercise 3 
Write a letter to your instructor describing in detail how 
you would organize and incorporate a creamery. Point out 
the peculiarities of the incorporation laws of your state. (You 
can secure a copy of these laws free from the Secretary of 
State.) 



CHAPTER IX 

THE BUSINESS LETTER 

In this age of complex business activity, where a large 
volume of the business of the country is done by letter, it is 
essential that the farmer, as well as the merchant, be able to 
write a correctly-arranged, direct-to-the-point business letter. 
Therefore, the purpose of this chapter is to set forth in as 
clear and concise a manner as possible the customary forms 
and arrangement of business letters. 

Business letters include all correspondence relating to the 
writer's financial, professional, or official dealings with other 
people, and should clearly set forth the subject matter of 
which they treat. 

In order for a mechanic to do good work he must have 
suitable material and good tools with which to work. In 
order for the writer of letters to do good work and create a 
good impression he should use a good grade of paper and pens, 
and ink that flows freely. 

We judge people largely by their surroundings and the 
associates they choose. The writer of a letter is judged largely 
by the general arrangement, wording, and neatness of his 
letter, and by the quality of stationery used. 

The preceding paragraph brings us to another important 
matter emphasized elsewhere in this text. Every farm, no 
matter how small, should have a suitable name. In fact, the 
importance of selecting a name for your farm cannot be 
overestimated. It not only lends value to your farm and 
dignity to your community, but it is a source of satisfaction 
to have neatly-printed stationery bearing the name of your 
farm, the name of the proprietor, and in some instances a 
sketch or small photograph indicating the products of the 
farm. (See models on page 124.) It is v/ell, however, to bear 
in mind that crowding too much on a letter head detracts 
from rather than adds to its value. Your post office address, 
including your box or R. F. D. number, should also appear on 

(123) 



124 BUSINESS ORGANIZATIONS, CORRESPONDENCE, FORMS 









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Fri'it Ranch 



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MODEL LETTER HEADS 



THE BUSINESS LETTER 125 

the letter head, correctly arranged, so that in writing the 
heading of the letter all that is necessary to do is to fill in 
the date. 

Skeleton Letter 

Before taking up the discussion of the various parts of a 
letter, a skeleton letter is presented herewith, with the differ- 
ent parts lettered for the purpose of reference. Study the 
skeleton form very closely, not only with a view to noting 
how and where the heading is arranged, the uniformity of the 
indentations, and the complimentary close and signature, but 
also notice how balanced the letter appears in the page. 

(a) , 

(b) 

(c) , 

(d) 

(e) :— 

(/) 



(/■) 



(/) 

(g) 



(h) 

Key to skeleton letter : — ' 

(a) First line of the heading. 

(b) Second line of the heading, 

(c) Name and title of the person to whom you are writ- 
ing. 

(d) Address of the person to whom you are writing. (In 
some cases the address should occupy two lines. See model, 
page 126.) 



126 BUSINESS ORGANIZATIONS, CORRESPONDENCE, FORMS 



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THE FORM 



THE BUSINESS LETTER 127 

(e) Salutation, as Dear Sir, Gentlemen, My dear Mr. 
Smith, etc. 

(/.) The beginning of the body of the letter. Strictly 
speaking, the salutation is a part of the first paragraph ; how- 
ever, for the sake of uniformity, it is well to begin the first 
paragraph of the body of the letter as far to the right of the 
left-hand margin as succeeding paragraphs. Note that all 
paragraphs are uniformly indented. 

(g) Complimentary close, as Yours truly, etc. 

(h) The writer's signature. Note that the signature be- 
gins as far to the right of the complimentary close as the 
second line of the heading (5) begins to the right of the first 
line (a). 

The Heading 

The heading of a letter includes the address of the writer 
and the date. It may occupy one, two, or three lines, depend- 
ing on the length of the address. 

The following forms illustrate one, two, and three line 
headings : — 

Form 1 

(a, b) Corvallis, Oregon, July 15, 1910. 
(c) .., 

(d) 

(e) :— 

(/) 

Form 1 shows a one-line heading begun far enough from the 
left-hand margin to fill the remaining space to the right. 
Should it be necessary to begin a heading to the left of the 
center of the body of the letter, in order to get it on one line, 
a two-line heading should be used. It is not good form for 
the heading to extend to the left of the middle of the sheet. 

Observe carefully the punctuation of the heading. 

Form 2 
((l) 68 Sixth Street, 

(5) Portland, Ore., July 5, 1910. 

(c) ..., 

(d) 

(e) :— 

(/) 



128 BUSINESS ORGANIZATIONS, CORRESPONDENCE, FORMS 

Form 2 shows a two-line heading, the first line begun at or 
a little to the right of the middle of the page, and the second 
line begun as far to the right of the first as the second line of 
the introductory address (d) is begun to the right of the first 
line of the introductory address (c). 

Form 3 

(a) Chehalis, Lewis County, Wash., 
(b) July 15, 1910. 

(c) , 

(d) 

(e) :— 

(/) 

Form 3 shows a two-line heading with the post office address 
occupying one line and the date the other. 

Form Jf. , 

(a) Corvallis, Ore., July 12, 1910. 
{h) R. F. D. No. 2. 

(c) , 

id). 

(e) :— 

if) 

Form 4 shows a two-line heading where it is desired to give 
the rural route. 

Form 4 might also be arranged as follows : — 

R. F. D. No. 3, 

Corvallis, Oregon, 

July 25, 1912. 

The models on page 126 illustrate incorrect and correct 
forms of a business letter. Note the arrangement of the head- 
ing, lines one and two. The R. F. D. or box number or street 
number should always be written in connection with the head- 
ing. Also note that line three has been skipped. This is done 
for the purpose of lending balance to the letter head. 

Punctuation 

The heading of a letter may be separated into distinct parts 
for the purpose of punctuation. A comma should follow each 



THE BUSINESS LETTER 129 

part of the address except the last, which should be followed 
by a period, as shown in the models. 

EXERCISE 4 

Write, punctuate, capitalize, and correctly arrange the fol- 
lowing headings: — 

1. Albany Oregon March 29 1888 

2. Vancouver Washington may 3 1912 

3. bloomington Indiana 821 Fifth street October 1 1910 

4. 321 seventh Street peoria Illinois May 4, 1911. 

5. 1907 Oregon agricultural College Sept 25 corvallis 
Oregon 

6. Write headings for four or more places with which you 
are familiar. 

Introductory Address and Salutation 

The introductory address of a letter is made up of two 
parts, (c) consisting of the full name and title of the person 
addressed, (d) consisting of his street number, P. 0. box, and 
post office address, or such other information as the person 
to whom you are writing may designate. 

The salutation is the term Dear Sir, Dear Madam, Gentle- 
men, etc., and should begin on a line with the body of the 
letter, that is, flush with the left-hand margin. 

Custom as well as courtesy requires that some title be used 
with the name. Individual titles generally used are Miss, 
Mrs., Mr., Dr., Rev., Esq., Prof., and Hon., depending on the 
rank or profession of the person addressed. When a part- 
nership or corporation requires a title, Messrs. may be used. 
A title should not be used if the name of the firm begins with 
"the." Only one title should be used, and it should be placed 
before or after the name, as Mr. John H. Brown, or John H. 
Brown, Esq., not Mr. John H. Brown, Esq. 

Models 

The following are good models showing the heading, intro- 
ductory address, salutation, and complimentary close, the body 
of the letter being omitted. The line after the complimentary 
close indicates the position of the signature. 



130 BUSINESS ORGANIZATIONS, CORRESPONDENCE, FORMS 

Form 1 

Aurora, 111,, March 10, 1912, 
Montgomery, Ward & Co., 

Chicago, Illinois. 
Gentlemen : — 

Yours truly. 



Form 2. 

67 Wabash Avenue, 

Chicago, June 24, 1910. 
Mr. A. P. Robinson, 

211 Globe Block, 

Seattle, Washington. 
Dear Mr. Robinson: — 

Sincerely yours. 



Forfn 3 

Michigan University, 

Ann Arbor, Michigan, 

June 14, 1911. 
Dear Frank: — 

Sincerely, 



To Mr, Frank Huntington, 

Beloit, Wisconsin. 

Form U 

The Ideal Farm, 

McMinnville, Oregon, 
October 12, 1914. 
Mr. Silas Blank, 

212 Second Ave., 

Portland, Oregon. 
Dear Sir: — 

Yours truly, 



Punctuation 

Carefully observe the arrangement and punctuation of the 
models. Notice that each part of the introductory address is 



THE BUSINESS LETTER 131 

followed by a comma, except the last, which is followed by a 
period. The salutation should be followed by a colon and the 
complimentary close by a comma. The writer's signature 
should be followed by a period. 

Capitalization 

Every sentence should begin with a capital letter, and every 

important word of the address should be capitalized; also 

observe that all titles are capitalized and that the first and 

last word and every noun in the salutation should begin with 

a capital. 

EXERCISE 5 

Write the following headings and introductory addresses, 
arranging and punctuating them according to the models 
given : — 

1. Wise Virginia June 15, 1910 Mr. F. B, Goshen Clint- 
wood Virginia Dear Sir 

2. Berkeley Calif April 11 1910 Mrs. James P. Hadley 
Eugene Oregon Dear Madam 

3. Raymond Washington 821 Fourteenth street July 18 
1909 Mr. T B Stidham 321 Railroad Ave Doty Wash 

4. 821 Second Avenue Seattle Washing May 4 1910 John 
P Randolph Esq 741 I street Tacoma Washington 

5. Ames Iowa, Dec 23 1908 The Pure Food Grocery Co 
City gentlemen 

6. Kalispell Mont Nov 8 1911 The Home Lumber Co Fargo 
N Dak gentlemen 

The Body of the L.etter 

The mechanical arrangement of the heading, introductory 
address, salutation, body of the letter, and complimentary 
close can be mastered in a short time by any one who is care- 
ful and painstaking. However, the composing of the letter 
proper is an entirely different matter, and by far the most 
difficult part of letter writing, and a good style can be acquired 
only by careful and painstaking effort. 

It is not the purpose of this chapter to give you certain 
forms of letters, worded in a specific way, for the various 
subjects about which it may be necessary for you to write. 
But it is rather its purpose to give you suggestions which will 



132 BUSINESS ORGANIZATIONS, CORRESPONDENCE, FORMS 

be of assistance to you in the writing of your business letters, 
and that will enable you to put into your letters your own 
originality in a clear, forceful, convincing manner. 

Some reference should always be made to the letter which 
is being answered, but in order to secure the best effect this 
reference should be made incidentally. Such opening phrases 
as "Your esteemed letter of the 10th inst. is received and in 
reply would say" are overworked and should be avoided. They 
are used by those who have fallen into a rut, or by those who 
lack originality. It would serve your purpose better to open 
your letter somewhat as follows : "The suggestion contained 
in your letter of the 15th inst. meets with my entire approval," 
or some similar opening that would be in conformity with 
the letter to which you are replying. 

It is an inexcusable mistake to fail to date a letter. With- 
out the date a letter is, in many cases, of no value. Especially 
is this so should it be necessary to bring the letter into court 
for the verification of some transaction about which the letter 
may have been written. The heading, including the date, 
should be written before taking up the body of the letter. 

A letter should always contain the complete address of the 
writer, even though you are corresponding with those who 
may reasonably be expected to know your address. This 
precaution often saves time and money, and preserves friend- 
ship. 

A business letter should be as brief as the nature of the 
subject about which you are writing will permit. If you are 
ordering goods by letter, you should clearly set forth the 
nature of the articles you desire, the way you wish to have 
them shipped, whether by express or freight, or whether they 
should be sent by mail. (See model on page 133.) If you are 
a regular customer of the firm, and have an account with 
them, you should clearly state the terms on which you desire 
to make this particular purchase. However, should it be your 
first order, you should either make sufficient remittance to 
cover the amount of the order or give some responsible person 
as reference. 

Should you be seeking information by letter, ask for that 
information in much the same way as though you were talking 



THE BUSINESS LETTER 133 

to the person. At all times be courteous, but do not try to 
overdo it. In writing to a person about a subject in which 
he is not directly interested, you should inclose a self-addressed 
stamped envelope for his reply. 

Remittances and Orders 

Remittances in the form of currency should never be sent 
through the ordinary letter. This is not only unsafe, but the 
sender has no evidence that the amount in question was sent 
or that the person to whom it was sent received it. You 
should choose as the safest and most convenient way of mak- 
ing a remittance one of the following methods : Postal money 
order, express money order, registered letter, check, or bank 
draft. Probably the most convenient method to those who 
live in rural districts would be the postal money order. 

In making a remittance, no matter how small the amount, 
you should state in your letter accompanying the remittance 
for what it is intended, the exact amount, the nature of the 
remittance, whether it is a check, money order, or otherwise. 

Model Order 

Sterling, Illinois, June 15, 1910. 
Ginn & Company, Publishers, 

2301-2311 Prairie Avenue, 

Chicago, Illinois. 
Gentlemen : — 

I inclose herewith postal money order for $4.72, for 

which please send me, by prepaid express, the following books: — 

The Working Principles of Rhetoric, by John F. 

Genung, 12mo, cloth, price $1.40; 
Lockwood and Emerson's Composition and Rhetoric, 

12mo, cloth, price $1.00; 
Library of Anglo-Saxon Poetry, Vol. I. Beowulf, 

12mo, cloth, price $1.12; 
Allen and Greenough's New Latin Grammar, 12mo, 
half leather, price $1.20. 
I should like to have these books reach me not later 
than the 20th inst., as I expect to use them in my summer 
school work beginning on the 21st. 

Yours truly, 
Inclosure. Student & Company. 



134 BUSINESS ORGANIZATIONS, CORRESPONDENCE, FORMS 

Where more than one item is ordered in a letter, as in the 
foregoing model, it is better to write them in a line or column, 
that is, assigning to each item a separate paragraph, followed 
with a complete description of the item, including the price, 
number, size, color, weight, and any other information that 
would insure your securing just what you wanted. 

Taste and Neatness 

As suggested elsewhere, the writer should throw his own 
originality into his letters ; but it must be steadily kept in 
mind that this must not be done in a haphazard, careless 
manner. One of the purposes of a letter is to get action. In 
order to do this the writer must, if possible, put himself in 
the place of the receiver of the letter and, having done this, 
carefully consider just what it would be necessary for some one 
else to do or say to get the desired action from himself. It 
would be quite impossible to lay down definite rules as to just 
how this should be done, but I am sure all will agree that the 
letter should be free from misspelled words, ink blotches, 
grammatical errors, slang, undue criticism, sweaty or dirty 
finger prints, or any other similar defects that would be un- 
pleasant to the eye. 

A business woman writing to a stranger should never neg- 
lect to prefix to her signature the title Miss or Mrs. in 
parenthesis. It is embarrassing to both the writer and the 
person who receives the letter, should a woman be addressed 
as Mr. In case a letter is received where it is evident that the 
writer is a woman, but she has merely signed "Mary Jones," 
omit the title and address her: "Mary Jones, Cedar Rapids, 
Iowa, Dear Madam : — " 

It is not supposed that those for whom this is intended 
would have the time to go into the real science of letter 
writing, as do the great majority of the large manufacturing 
concerns of the country who conduct extensive advertising 
campaigns, and for this reason our suggestions cover merely 
those points it is thought would be of assistance to the ma- 
jority of those who are pursuing this course. 

The letter should be arranged artistically on the page. You 
should endeavor to arrange the letter so that there will be an 



THE BUSINESS LETTER 135 

equal blank space at the top and at the bottom of the page. 
If the letter is short, wider left and right hand margins should 
be allowed so that the letter will occupy more vertical space, 
and thus avoid a stringy appearance. 

If letter paper is used, size 8|^ x 11 inches, the indentations 
for introductory address and paragraphs should be deeper 
than when note paper, usually about 8jx5i inches, is used. 
When letter paper is used, the indentations should be about 
three fourths inch; when using note paper, the indentations 
should be about one half inch. 

Paging 

If more than one page is required for a letter, each page, 
except the first, should be numbered in the order in which it 
is written. Before the letter is inclosed in the envelope the 
pages should be arranged in the order in which they should 
be read. 

The Paragraph 

A series of connected sentences treating of a single topic 
make what is called a paragraph. In letters, as in other 
forms of composition, the change from the discussion of one 
topic to another should be indicated by an indented line, which 
catches the eye of the reader and tells him that another topic 
is to be considered. 

The Postscript 

The postscript is an afterthought or a statement added for 
emphasis after the body of the letter has been finished. The 
postscript should be indented the same as paragraphs, and 
should begin on the second line beneath the signature. It 
should be preceded by "P. S." and followed by the initials of 
the writer. 

Study the arrangement of the following letter: — 

Corvallis, Oregon, July 15, 1910. 
The Home Real Estate Co., 

Forest Grove, Oregon. 
Gentlemen : — 

In accordance with our agreement of June 15th, I am 
sending you attached hereto my personal check, No. 68, on 



136 BUSINESS ORGANIZATIONS, CORRESPONDENCE, FORMS 

the First National Bank of Corvallis, for $42.43, to be applied 
as follows: — 

$40.00 in payment of the first monthly installment due 
on residence lot No. 6, Block E, Wilkinson's addition to the 
City of Forest Grove, Oregon ; $2.42 in payment of the interest 
on the remaining eleven monthly installments of $40.00 each. 

Kindly send me credited coupon for the first installment 

and interest. 

Yours truly, 



Inclosure. 

EXERCISE 6 

1. Make up and write the heading, introductory address, 
salutation, and complimentary close for five different letters, 
referring to the models, if necessary, for the correct forms. 

2. Write a letter, dated at your home, ordering five dif- 
ferent articles of merchandise. 

3. You were at your county seat several days ago and 
ordered your local paper. You have not yet received a copy. 
Write a courteous letter to the editor requesting him to inves- 
tigate the delay and to send the paper to your address regu- 
larly until notified to discontinue it. 

4. In the early part of the harvest season you purchased 
farm implements of a hardware dealer of your city, amounting 
to $175.50. It is now nearing the time that you agreed to 
make the second payment of $75.00. Your grain yield has 
not been as large as you expected, and, owing to certain 
other obligations you must meet, you have found it necessary 
to ask for an extension of time on at least half of the amount. 
Write him a letter explaining your situation and ask for the 
extension of time. 

5. Your hardware dealer has agreed to accept $40.00 and 
to grant an extension of thirty days on the balance. Write 
him a letter thanking him for the extension and inclose your 
check for $40.00. Call attention to the remittance. 

FOLDING THE LETTER. 
Paper 

There are two sizes of business letter paper, namely, letter 
size, 8^ x 11 inches, and note size, usually 8^ x 5i inches. 



THE BUSINESS LETTER 137 

though the size of note paper varies. The larger size is gen- 
erally used by business houses. 

Folding 

The following is the correct method of folding letter paper : 
(1) Turn the lower edge up to within a half or quarter of an 
inch of the top, then crease- the fold, being very careful that 
the side edges of the paper are exactly even. The reason for 
not allowing the bottom and top edges of the paper to be even 
is to make the unfolding of the letter easier, and without loss 
of time. (2) With the creased edge of the letter toward you, 
fold over the right edge a little less than one third, being 
careful to keep the creased edges of the first and second folds 
even. (3) Fold over the left edge a little less than one third, 
overlapping the second fold. The second and third folds 
should be of equal width. The middle fold should be a little 
narrower than the envelope into which the letter is to be 
inserted, and a little wider than either the right or left hand 
fold. 

Inserting the Letter 

The letter is now ready to be put into the envelope. Take 
the envelope in the left hand with its back up and the flap 
opening toward the right. Take the letter in your right hand 
with the folded edges up. Insert first the edge folded last. 

In opening a book the left-hand cover is usually opened first. 
Through the unconscious training of years you do this without 
apparent thought. Why? Because it is the natural way. 
The letter should be folded and put into the envelope in accord- 
ance with the preceding instructions in order to enable the 
person who receives it to unfold it and begin reading without 
loss of time. 

In large business houses where hundreds of letters are 
received daily, the letters are usually placed on a table, back 
uppermost, and opened by inserting a paper knife beneath the 
closing fold and slitting all the way along the top edge. 

In folding note paper, first fold the bottom edge up a little 
less than one third, then fold the top edge down a little less 
than one third, overlapping the bottom fold. With the en- 
velope held in the same position as when inserting the larger 



138 BUSINESS ORGANIZATIONS, CORRESPONDENCE, FORMS 

size paper, with the folded edges of the letter up, insert first 
the edge folded last. 

The Envelope 

Great care should be exercised in writing the directions on 
the envelope. In the first place, the name of the person to 
whom you are writing should appear in the introductory- 
address of the letter just as he is accustomed to spell it, 
then it should be written on the envelope just as it is in the 
introductory address, followed in the order named by the 
street and house number, post office, and state. Should the 
name be followed by more than one title, they should be 
separated by commas. 

The Return Card 

Every letter you mail should bear your return card in the 
upper left-hand corner of the envelope. If the envelope bear 
your name and address only, the letter should be returned to 
you at the end of thirty days, provided it is not called for 
within that time. If it is desired to have the letter return 
to you within a specified time, provided it is not called for, the 
words ''If not called for within — days, return to," followed 
by your name and address, will insure its return to you in 
case it is not called for. Should the envelope not bear your 
name and address, and remain uncalled for for thirty days, it 
will be forwarded to the dead letter office. 

The Stamp 

The stamp should be placed in the upper right-hand corner 
of the face of the envelope. It should be firmly attached and 
the edges of the stamp should be about one eighth of an inch 
from, and parallel to, the edges of the envelope. 

The following are good models : — 



THE BUSINESS LETTER 



139 



(1) 






Stamp 


Mr. Karl L. Goodall, 


Corvallis, 


Oregon. 



(2) 




Stamp 


Armour Packing Company, 


Chicago, Illinois. 



(3) 






stamp 


Gregg Publishing Company, 


151 Wabash Avenue, 


Chicago, 111. 



^^^ 1 




Stamp 




Mr. Harvey H. Burnham, 


Cottage Grove, 


Oregon, 
c/o Imperial Hotel. 



140 BUSINESS ORGANIZATIONS, CORRESPONDENCE, FORMS 

EXERCISE 7 

Write the following envelope addresses, using blank slips 

of paper the size of a regular business envelope — 3^ x 6^ 
inches : — 

1. Mr. R. P. Smith, Logan, Utah. 

2. Mrs. Raymond H. White, 728 Seventh Street, Lewiston, 
Idaho. 

3. Miss Gertrude Hamilton, Beaver Creek, Oregon. 

4. Henry H. Lathrop, Thacker, West Virginia. 

The punctuation marks are omitted in the following in order 
to give the student practice in inserting them : — 

5. Rev James R Hamilton Pastor First M. E. Church 
Spokane Washington. 

6. Hon. J. H. Ackernan State Supt of Schools Salem 
Oregon 

7. Prof G. H. Patterson Care Willamette University Salem 
Oregon 

8. Mr Geo W Mathews Association Hall University of 
Wisconsin Madison Wisconsin 

9. The Home Correspondence School Springfield Mass 

10. Mr. Frederick M. Bollinger Transient St Paul Ne- 
braska. 

Note. — In writing to a person who is stopping in a city only 
temporarily where the free delivery system is in operation, 
the word "Transient" or "General Delivery" should be written 
in the lower left-hand corner of the envelope. 



CHAPTER X 

BUSINESS FORMS 

Every farmer, mechanic, and professional man should un- 
derstand the ordinary business forms in daily use. It is often 
a matter of humiliation to persons of superior ability in other 
lines to acknowledge that they are ignorant of the proper 
form of a simple business paper. The purpose of this chapter 
is to give models and explanations of the forms likely to be 
used by every business man. 

The Invoice 

An invoice is an itemized statement of goods bought or 
sold. It should contain detailed information regarding date, 
parties, quantity and description of the goods, prices, dis- 




^ Marshalltownr-Jowa,... ^^^ffH/"- . . / j 190^ 



MERRITT GREENE & SON 






^/6 



i/fy ,^^^ 



J-^ 



C6- 



yc ^c^Z^ ^:^CL^ 



'-^ 



^S'Z. 



o^ 



/Z.o<i 



/Zc 



//y^ ^C 









72L£^^*i ^ 




MODEL INVOICE 
(141) 



142 BUSINESS ORGANIZATIONS, CORRESPONDENCE, FORMS 

counts or terms, how the goods are shipped, by whom packed, 
etc. If paid, it should be properly receipted. 



EXERCISE 8 

Write invoices for all the sales in Lesson 20. 
paper, or rule the required form. 



Use Journal 



The Statement 

A statement is an abstract of the debits and credits of an 
account. It should contain the items as they appear in the 
Ledger, arranged so as to show at a glance the condition of 
the account. The statement is often confined to the balance 
due, but this form is seldom satisfactory. ;See page 143.) 

EXERCISE 9 

Write statements of all the open accounts receivable after 
closing the Ledger in Lesson 20. Use Journal paper or rule 
the required form. 

The Receipt 



No. 







"Dollars 




A receipt should always be taken when a payment is made, 
unless it is made by check, in which case the indorsement 
constitutes receipt. It should give the name of the parties, 
the amount paid, when and for what it is made. A dupli- 
cating receipt book should be used when a large number of 
receipts are given. 



BUSINESS FORMS 



143 




rshalltown, lo 



.£^c<yt^ 




^6 190f 



^^:^*^t-^-«' X Vp^"^^ 



in account with 

MERRITT GREENE & SON 

"EDGWORTH" FARtvl, 
, "LINN BROOK" FARfvl 

LINN BROOK DAIRY CO. 




MODEL STATEMENT 



144 BUSINESS ORGANIZATIONS, CORRESPONDENCE, FORMS 

EXERCISE 10 

Write receipts for all the cash received in Lesson 20, using 
slips 3x6 inches. 

The Promissory Note 



^S^^^SSSES^Ssss!^^ 




G3lifi3S3S5^SE257SHS£iS!S5i 














A promissory note is a written contract for the payment 
of a specified amount at a given time and place, with or 
without interest. When it is made to the order of the payee, 
it becomes a negotiable paper. The parties to a note are 
the maker (Duncan), M^ho obligates himself to pay; the payee 
(Hamilton), in whose favor the note is drawn; and the 
indorsers, who transfer the note to other parties. The first 
indorser is always the payee. The law relating to negotiable 
instruments is very important and should be thoroughly un- 
derstood by all who use them. It is too technical and exten- 
sive to be discussed here. No note should be given unless its 
terms are thoroughly understood by both parties. 

EXERCISE 11 

Draw notes for every transaction involving a note in Lesson 
20. Use slips of paper 3x6 inches. Be sure to fill out the 
vacant space in the amount line. When this is not done, the 
amount is often raised by forgers. 

The Check 

A check is a form of draft by which a depositor draws 
money from a bank. It has the same parties and the same 
legal aspects as the draft. The increasing use of the bank 
by all classes for facilitating business makes this one of the 



BUSINESS FORMS 



145 




most important of negotiable instruments. The law govern- 
ing its use should be thoroughly understood. Checks should 
be written in ink, the amount should be written in both 
words and figures. All checks should be numbered. It is 
sometimes desirable for the payee to require a certification 
from the bank that the check is good. The form of this 
certificate is given in the model. It has the same effect as 
the acceptance of the draft. When a check is certified, the 
bank is responsible for the amount. 

EXERCISE 12 
Write checks for all the payments in Lesson 20. 



The Draft 







a^«^ 



^;:<^^&^^ ^ V 



zA^_ 



^%M^ 



^^a/rce //^'^ao'i^'Uy/i/^r/- 



A draft is a written order by one person on another to pay 
money to a third person. It is a time or sight draft, according 
to the time specified for payment. If it reads, as in the illus- 



146 BUSINESS ORGANIZATIONS, CORRESPONDENCE, FORMS 

tration, "At ten days' sight," it is payable ten days after 
acceptance and is called a time draft; if it reads "At sight," 
it is payable upon presentation and is called a sight draft. 
It is a bank draft if issued by one bank on another; an indi- 
vidual draft when issued by a firm or individual on another 
firm or individual. The parties to a draft are : The drawer 
(Bliss), who orders the payment; the drawee (Eagan), who 
pays; the payee (Neagle), in whose favor the draft is drawn; 
and the indorsers, who transfer the draft to others.- The 
payee is always the first indorser. The indorsement should 
be made on the back of the left end of the draft. If merely 
the name is written, it is a blank indorsement and may be 
paid to any one upon presentation; if the indorsement reads 
"Pay to the order of John Doe," the amount can be paid only 
to the party designated by Doe and is called a full indorse- 
ment. The draft is a negotiable paper if payable "to the 

order of " or "to bearer" and is subject to the laws of 

negotiable instruments. When the drawee signifies his will- 
ingness to pay a time draft, he "accepts" it as shown in the 
model. The acceptance has the same force as the signing of 
a note. The law of negotiable instruments should be studied 
very thoroughly by every business man. 

EXERCISE 13 
Write the draft called for under June 11, Lesson 16. 

The Certificate of Deposit 




loL 





:,=^: 



. INTEREST TO STOP AT MATURITY. - W< .' ( y/f, 



0j2=miz 



p^ — -Tw Jgld^lSb 



':,m/>/i//jx'/^'''^'i 



.%.&r 



A certificate of deposit is a receipt issued by a bank for a 
temporary deposit. It is discussed here only to emphasize the 



BUSINESS FORMS 



147 



great importance of establishing banking connections. If, for 
any reason, it is impracticable to open a regular bank account, 
as discussed on page 25, any money not needed for current 
use should be deposited on a certificate. If, as in the model, 
the deposit is allowed to remain for a definite period, interest 
will be allowed at the current rate. Withdrawals are usually 
allowed by indorsement of the amount on the certificate, but 
not by check. A certificate of deposit is usually issued "to 
the order of ," and is therefore transferable by indorse- 
ment. 

The Voucher Check 



rkL^^aaa 




TO First National Bank 

CORyA14«IS,OREGON. 



. CORVAUrl 



CORVALLIS ORCM^PID COMPANY 




l.^4.u.l»>'icafiit^ Oi// Z Pfou/,- J. /^ai/sj-erjen(e ^- j/. S^r^yc^^ /ifi^7ti>- 



The voucher check is an exceedingly convenient form, espe- 
cially in corporate business. By referring to the illustration 
above, it will be seen that it consists of an ordinary check 
on one side, with a blank for the signature of the president or 
some other officer authorized to approve vouchers. The bank 
should be instructed to refuse payment unless the check is 



148 BUSINESS ORGANIZATIONS, CORRESPONDENCE, FORMS 

approved or countersigned. The back provides for the distri- 
bution of the payments, and from this the entries are made 
in the records. Space is left for indorsements on the left end 
of the back. The indorsement shown on the model constitutes 
a satisfactory receipt in most cases. When a definite invoice 
or other item is paid, it is well to specify the date or number, 
as illustrated. Never fail to number your checks consecu- 
tively. 

EXERCISE 14 

Prepare three different forms of voucher checks, modified 
to suit your own ideas. Let one be similar to the model. 



PART IV 
USEFUL TABLES 



USEFUL TABLES 



TABLE 1 



Six Per Cent. Interesl Table 



Time 


$1 


$2 


$3 


$4 


$5 


$6 


$10 


$20 


$50 


$100 


$1000 


1 


























1 


2 


17 


2 























1 


2 


3 


34 


3 






















1 


3 


5 


50 


4 






















1 


3 


7 


67 


5 






















2. 


4 


8 


83 


6 




















2 


5 


10 


1.00 


7 




















2 


6 


12 


1.17 


8 











1 








3 


7 


13 


1.33 


9 











1 






2 


3 


8 


15 


1.50 


10 








1 


1 






2 


3 


8 


17 


1.67 


15 







1 


1 




2 


3 


5 


13 


25 


2.50 


20 







1 


1 


2 


2 


3 


7 


17 


33 


3.33 


25 







1 


2 


2 


2 


4 


8 


21 


42 


4.17 


30 


1 




2 


2 


3 


3 


5 


10 


25 


50 


5.00 


33 


1 




2 


2 


3 


3 


6 


11 


28 


55 


5.50 


63 


1 


2 


3 


4 


5 


6 


11 


21 


53 


1.05 


10.50 


93 


2 


3 


5 


6 


8 


9 


16 


31 


78 


1.55 


15.50 


1 


1 


1 


2 


2 


3 


3 


5 


10 


25 


50 


5.00 


2 


1 


2 


3 


4 


5 


6 


10 


20 


50 


1.00 


10.00 


3 


2 


3 


5 


6 


8 


9 


15 


30 


75 


1.50 


15.00 


4 


2 


4 


6 


8 


10 


12 


20 


40 


1.00 


2.00 


20.00 


5 


3 


5 


8 


10 


13 


15 


25 


50 


1.25 


2.50 


25.00 


6 


3 


6 


9 


12 


15 


18 


30 


60 


1.50 


3.00 


30.00 


7 


4 


7 


11 


14 


18 


21 


35 


70 


1.75 


3.50 


35.00 


8 


4 


8 


12 


16 


20 


24 


40 


80 


2.00 


4.00 


40.00 


9 


5 


9 


14 


18 


23 


27 


45 


90 


2.25 


4.50 


45.00 


10 


5 


10 


15 


20 


25 


30 


50 


1.00 


2.50 


5.00 


50.00 


11 


6 


11 


17 


22 


28 


33 


55 


1.10 


2.75 


5.50 


55.00 


12 


6 


12 


18 


24 


30 


36 


60 


1.20 


3.00 


6.00 


60.00 



Example.— Find the interest on $340.00 at 8% for 8 months and 8 days. 
Solution : At 6% the interest on 

$300.00 for 8 mos. = 3 X $4.00 or $12.00 

" 8 days = 3 X .13 or .39 

40.00 " 8 mos. =; 4 X .40 or 1.60 

" 8 days = 4 X .01 or .04 



Total, 
Add K to produce 8%, 

Answer, 



$14.03 
4.68 



$18.71 



(151) 



152 USEFUL TABLES 



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USEFUL TABLES 153 

TABLE 3 
Interest Table 

The following will be found convenient in the absence of 
extended interest tables. To find the interest on a given sum, 
for any number of days, at any rate of interest : — 

At 5% multiply principal by number of days, divide by 72 

At 6% multiply principal by number of days, divide by 60 

At 7% multiply principal by number of days, divide by 52 

At S% multiply principal by number of days, divide by 45 

At 9% multiply principal by number of days, divide by 40 

At 10% multiply principal by number of days, divide by 36 

At 12% multiply principal by number of days, divide by 30 

At 15% multiply principal by number of days, divide by 24 

At 20% multiply principal by number of days, divide by 18 



TABLE 4 
Minimum Weights of Produce 

The following are minimum weights of certain articles of 
produce according to the laws of the United States : — 

Lbs. per Bushel - Lbs. per Bushel 

Wheat 60 Dried Peaches 33 

Corn, in the ear 70 Dried Apples 26 

Corn, shelled 56 Clover Seed 60 

Rye 56 Flax Seed 56 

Buckwheat 48 Millet Seed 50 

Barley 48 Hungarian Grass Seed. . . .50 

Oats 32 Timothy Seed 45 

Peas 60 Blue Grass Seed 44 

White Beans 60 Hemp Seed 44 

Castor Beans 46 Salt (see note below). 

White Potatoes 60 Corn Meal 48 

Sweet Potatoes 55 Ground Peas 24 

Onions 57 Malt 34 

Turnips 55 Bran 20 

SALT.— Weight per bushel as adopted by different States ranges from 50 to 80 pounds. 
Coarse salt in Pennsylvania is reckoned at 80 pounds, and in Illinois at 50 pounds per bushel. 
Fine salt in Pennsylvania is reckoned at 62 pounds, in Kentucky and Illinois at 55 pounds per 
bushel. 



154 



USEFUL TABLES 



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USEFUL TABLES 



155 



TABLE 6 



Goiamon M^easures 



Long Measure 

12 inches = 1 foot. 

3 feet = 1 yard. 
5^ yards = 1 rod. 

320 rods = 1 mile. 
1 mile = 5,280 feet. 

The following are also 
used : — 

1 size = ^ inch. 

(Used by shoemakers.) 

1 hand = 4 inches. 

(Used in measuring the height 

of horses.) 

1 fathom = 6 feet. 

(Used in measuring depths at 

sea.) 

1 knot = 1.15 miles. 
(Used in measuring distances 

at sea.) 

Dry Measure 

2 pints = 1 quart. 
8 quarts = 1 peck. 

4 pecks = 1 bushel. 

1 bushel contains 2,150.42 
cubic inches or approximately 
1^ cubic feet. 

Liquid Measure 

4 gills = 1 pint. 

2 pints = 1 quart. 

4 quarts = 1 gallon. 

1 gallon contains 231 cubic 
inches. 

1 cubic foot equals 7i gal- 
lons. 



Square Measure 

144 square inches = 1 square 

foot. 
9 square feet = 1 square 

yard. 
30i square yards = 1 square 

rod. 
160 square rods = 1 acre. 
640 acres = 1 square mile. 

An acre is equal to a square 
whose side is 208.71 feet. 

Surveyors' Linear Measure 

7.92 inches = 1 link. 
100 links = 1 chain. 
80 chains = 1 mile. 
Gunter's chain is the unit 
and is 66 feet long. 

Surveyors' Square 
Measure 

10,000 square links = 1 sq. 

chain. 
10 square chains = 1 

acre. 
10 chains square = 10 

acres. 

Cubic Measure 

1,728 cubic inches = 1 cubic 
foot. 
27 cubic feet = 1 cubic yd. 
128 cubic feet = 1 cord. 



156 USEFUL TABLES 



TABLE 7 



Housekeepers' Timetable 

*, minutes to the pound. The time given is the general average ; the time will vary slightly 
with the quality of the article, b, boiled ; f , fried ; bk, baked ; br, broiled ; s, stewed ; r, 
roasted. 

Hours. Min. 

Asparagus, b 15-30 

Beans, b 1 — 

Beans with green corn, b 45 

Beef, r *25 

Beefsteak, br. or f 15 

Beef, salted, b 35 

Bass, fresh, br 20 

Beets, young, b.. 2 — 

Beets, old, b 4 30 

Bread, corn, bk 45 

Bread, wheat, bk 1 — 

Cabbage, b 1 — - 

Cauliflower, b 30 

Cake, sponge, bk 45 

Carrot, orange, b 1 — 

Chicken, b 1 — 

Codfish, dry and whole, b *15 

Custard (one quart), bk 1 20 

Duck (tame) , r 1 30 

Duck (wild) ,r 1 — 

Dumpling, apple, b 1 — 

Eggs, hard b 10 

Eggs, soft b 3 

Eggs, f 5 

Fowls, domestic, r. or b 1 — 

Goose, wild, r *20 

Lamb, b *20 

Meat and vegetables, hashed 30 

Mutton, r *25 

Mutton, br 20 

Onions, b 30 

Oysters, s 5 

Parsnips, b 1 — 

Pork, r *30 

Pork, b *25 

Potatoes, b 30 

Potatoes, bk 45 

Potatoes, r 45 

Rice, b 20 

Salmon, fresh, b 8 

Sausage, f 25 



USEFUL TABLES 157 

Hours Min. 

Sausage, br 20 

Soup, vegetable, b 1 — 

Soup, chicken, b 2 — 

Soup, oyster or mutton, b 3 30 

Spinach, b 30 

Tapioca, b 1 30 

Tomatoes, fresh, b 1 — 

Tomatoes, canned, b 30 

Trout or salmon, b. or f 30 

Turkey, br. or r *20 

Turnips, b 45 

Veal, br 20 

Venison steak, br 20 



TABLE 8 
Weights and Measures in Ordinary Use 

3 level coffee cups sifted flour = 1 pound. 

2 level coffee cups pulverized sugar = 1 pound. 
1^ level coffee cups granulated sugar = 1 pound. 
If level coffee cups "A" sugar = 1 pound. 

4 scant teacups sifted flour = 1 pound. 

2 scant teacups soft butter, packed = 1 pound. 

2 scant teacups granulated sugar = 1 pound. 
2^ scant teacups brown sugar = 1 pound. 

8 or 10 ordinary eggs ^ one pound. 

4 teaspoonfuls = 1 tablespoonful, liquid. 

4 tablespoonfuls = 1 wineglass or half a gill. 

2 wineglasses = 1 gill or half a cup. 

2 gills = 1 coffee cupful or 16 tablespoonfuls. 

2 coffee cupfuls = 1 pint. 

2 pints = 1 quart. 

4 quarts = 1 gallon. 

2 tablespoonfuls = 1 ounce, liquid. 

1 tablespoonful salt = 1 ounce. 
16 ounces = 1 pound or a pint of liquid. 
25 drops of thin liquid = 1 common teaspoonful. 

1 pint of finely chopped meat, packed solidly = 1 pound. 



158 



USEFUL TABLES 



TABLE 9 
Gestation or Birth Table 



Date of 
Service. 

January 1 

■' 2 

" 11 

" 16 

" 21 

" 26 

" 31 

February ... 5 

" 10 

" 15 

" 20 

" 25 

March 2 

" 7 

" 12 

" 17 

" 22 

•• 27 

April 1 

'■ 6 

" 11 

" 16 

" 21 

" 26 

May 1 

•■ 6 

'• 11 

■■ 16 

" 21 

•' 26 

'• 31 

June 5 

'• 10 

•' 15 

" 20 

" 25 

" 30 

July 5 

" 10 

" 15 

" 20 

" 25 

" 30 

August 4 

" ....!.. .14 

" 19 

•■ 24 

" 29 

September - • 3 

8 

" 13 

" 23 

" 28 

October 3 

" 8 

" 13 

" 18 

" 23 

•• 28 

November ■ • 2 

" 7 

" 12 

" 17 

•■ 22 

" 27 

December ... 2 

" 7 

" 12 

" 17 

" 22 

" 27 

" 31 



Mares. 

340 Days. 

Date of Birth. 

December • • ■ 6 

■' 11 

■' 16 

" 21 

" 26 

" 31 

January 5 

" 10 

" 15 

" 20 

" 25 

" 30 

February ■ • • 4 

" 9 

" 14 

" 19 

" 24 

March 1 

" 6 

" 11 

•' 16 

" 21 

" 26 

■' 31 

April 5 

" 10 

" 15 

" 20 

" 25 

" 30 

May 5 

" 10 

" 15 

" 20 

" 25 

" 30 

June 4 

" 9 

" 14 

" 19 

" 24 

•' 29 

July 9 

'•^ 14 

" 19 

" 24 

" 29 

August 3 

" 13 

■' 18 

" 23 

'■ 28 

September ■ • 2 

" 7 

'• 12 

'• 17 

■' 22 

•• 27 

October 2 

" 7 

•' 12 

•' 17 

■■ 22 

" 27 

November . . 1 

" 6 

" 11 

" 16 

" 21 

" 26 

December • ■ • 1 



Cows. 

283 Days. 

Date of Birth. 

October 10 

" 15 

." 20 

" 25 

" 30 

November . • 4 

" 9 

" 14 

" 19 

" 24 

" 29 

December ... 4 

" 9 

" 14 

" 19 

'■ 24 

" 29 

January ... 3 

" 8 

" 13 

" 18 

" 23 

" 28 

February ... 2 

" 7 

" 12 

" 17 

" 22 

'■ 27 

March 4 

" ■: 9 

" 14 

•• 19 

" 24 

" 29 

April 3 

•' 8 

" 13 

" 18 

" 23 

" 28 

May 3 

" 8 

'■ 13 

" 18 

" 23 

" 28 

June 2 

" 7 

" 12 

" 17 

" 22 

" 27 

July 2 

" 7 

•' 12 

" 17 

" 22 

•* 27 

August 1 

'^ 6 

•• 11 

•• 16 

" 21 

■' 26 

•' 31 

September • . 5 

" 10 

" 15 

■' 20 

" 25 

" 30 

October ■ . . • 5 
" 9 



Ewes. 

150 Days. 

Date of Birth. 

May 30 

June 4 

" 9 

" 14 

" 19 

'• 24 

" 29 

July 4 

" 9 

" 14 

" 19 

" 24 

" 29 

August 3 

" 8 

" 13 

" 18 

'■ 23 

" 28 

September . . 2 

•• 7 

•' 12 

" 17 

" 22 

" 27 

October 2 

•' 7 

" 12 

" 17 

" 22 

" 27 

November .. 1 

" 6 

•' 11 

" 16 

" 21 

" 26 

December . . 1 

" 6 

" 11 

" 16 

" 21 

" 26 

" 31 

January .... 5 

" 10 

" 15 

'• 20 

'■ 25 

" 30 

February • . - 4 

■' 9 

•' 14 

" 19 

" 24 

March 1 

•• 6 

•' 11 

" 16 

• 21 

■ 26 

■■ 31 

April 5 

■' 10 

" 15 

•• 20 

" 25 

" 30 

May 5 

" 10 

" 15 

" 20 

" 25 

" 29 



Sows. 

112 Days. 

Date of Birth. 

April 22 

■■ 27 

May 2 

" 7 

■' 12 

" 17 

■* 22 

" 27 

June 1 

" 6 

" 11 

" 16 

" 21 

" 26 

July 1 

" 6 

" 11 

" 16 

" 21 

" 26 

" 31 

August 5 

10 

" 15 

" 20 

" 25 

" 30 

September . • 4 

" 9 

" 14 

" 19 

■■ 24 

" 29 

October 4 

■' 9 

" 14 

" 19 

" 24 

" 29 

November . . 3 

" 8 

" 13 

" 18 

" 23 

" 28 

December -. 3 

" 8 

'• 13 

" 18 

" 23 

" 28 

January 2 

■' 7 

" 12 

" 17 

■■ 22 

" 27 

February ■ ■ . 1 

■• 6 

" 11 

" 16 

■■ 21 

■■ 26 

March 3 

■• 8 

'• 13 

" 23 

" 28 

April 2 

" 7 

" 12 

" 17 

" 21 



USEFUL TABLES 159 

Ho-w to Find the Number of Tons in a Hay Stack. 

A fairly accurate rule is as follows: Subtract the width 
from the over (the "over" is the distance from the ground on 
one side over the stack to the ground on the other side), 
divide by two, and multiply by the width, and then by the 
length. We have now found the number of cubic feet in the 
stack. To find the number of tons, proceed as follows : For 
a stack twenty days old, or under, divide by 512; between 
twenty and sixty days old, divide by 422 ; over sixty days old, 
divide by 380. 

A more accurate rule for finding the number of cubic feet 
is as follows: Subtract the width from the over; divide by 
the height, then multiply successively by the over, the width, 
the length, and by .225. The tons are then found as above. 



INDEX 



Page 

Accounts, 

Value of, 37 

Farm, Difficulties of, 9 

Household, 56, 60, 62 

Personal, 21, 22, 23 

Shop, 66 

Agriculture, Statistics of, 110 

Articles of Incorporation, 119 

Balance Sheet, 47, 48 

Bank Account, 

Explained, 25 

Illustrated, 26 

Bill and Receipt File, 

Explained, 14 

Illustrated, 16, 24 

Blank Books, 2 

Bookkeeping, 

Difficulties of Farm, 9 

Importance of, 8 

Breeding Record, 103 

Business Forms, . 141 

Business Letter, The, 123 

Business Organizations, 115 

By-Laws, Form of, 119 

Cash Books, 19, 44 

Explained, 13, 39 

Illustrated, 44, 60 

Certificate of Deposit, 146 

Check, The, 144 

Closing the Ledger, 82, 86 

Commercial Accounting, 70 

Copartnership, Articles, 116 

Corporations, 117 

Cost of Production, 91 

Of Crops, 96 

Of Live Stock, 92 

Dairy Herd, Test of, 93 

Day Book, 

Explained, 13 

Illustrated, 10, 18 

Deposit, Certificate of, 145 

Depreciation, 14 

Double Entry, 

Books Needed, 38, 70 

Compared with Single, 38 

Superiority of, 37 

Draft, The, 144 

Equipment, 39 

Exchange Phase, Importance of, 8 

Farming, A Paying Business, 8 

Feed Record, 103, 107 

File, Letter and Bill, 16, 24 

Hay, How to Measure, 159 

History of the Farm, 13 

Household Accounts, 56, 60, 62 

Home Study, 28, 161 



Improvements, 

Introductory, 

Inventory, 

Explained, 

Illustrated, 

Continued, 
Investment, The, 
Invoice, 
Joint Stock Companies, 
Journalizing, 
Labor Records, 
Labor Report, 
Ledger, 

Original Entry, 

Lessons, 



Page 
39 

7 

14 

17, 18, 20 

17, 25 

109 

141 

117 

73, 75, 76, 78 

98, 102, 108 

101 

41, 70 

87 

29, 43, 58, 76, 106 

(See also page 161) 

Closing, 20, 86 

Lessons, Illustrative, 

29, 43, 58, 76, 106 
Live Stock, Cost of Production, 

92, 97 
Methods of Bookkeeping, 

10, 12, 36, 69 
Milk Records, 98, 102, 106 

Note, The Promissory, 143 

Office Methods, 100 

Organizations, 115 

Partnership, 115 

Personal Accounts, 21, 22, 23 

Phases of Farming, 8 

Plot, The Farm, 99, 105, 109 

Poultry Records, 98 

Practice Work, 29, 43, 58, 76, 106 
Posting, 74, 81, 82 

Profit and Loss Statement, 47, 48 
Profits, How to Determine, 15 

Prosperity of the Farmer, 7 

Questions, Review, 67 

Rates of Depreciation, 14 

Receipt, The, 142 

Records, What They Should 

Show, 9 

Repairs, 39 

Sales Book, Duplicating, 104 

Shop Accounts, 66 

Single Entry, 13 

Special Records, 98 

Statement, The, 142 

Financial, 18, 20, 47, 48, 84 

Success, Causes of, 7 

Supplies, 39 

Tables, Useful, 149 

Terms and Definitions, 71 

Time Book, 10, 104 

Trial Balance, 40, 57, 84 

Voucher Check, 147 



(160) 



INDEX TO THE HOME-STUDY COURSE 



The Home-Study Course in Farm Accounting and Business 
Methods comprises fifteen assignments as follows: — 



Blank 
Assign- Form 

ment Lesson No. 

I. 1 The Inventory ; 1* 

2 The Day Book and Cash Book 1 

II. 3 Personal Accounts 1 

4 Statement No. 2 1 

5 The Bank Account 1 

III. 6 Cash Receipts, Set 1 (Also Form 14) . . 2 

7 Cash Payments, Set 1 (Also Form 15) 3 

8 Statement No. 3 12 

IV. 9 Cash Receipts, Set 2 (Also Form 14) 2 
10 Cash Payments, Set 2 (Also Form 15) 3 

V. 12 Household Accounts, Set 1 (Also 

Forms 16 and 17) 4 and 5 

13 Household Accounts, Set 2 (Also 

Forms 16 and 17) 4 and 5 

VI. 11 Statement No. 4 12 and 13 

14 Continued Inventory 1 

VII. 22 Milk Record 10 

23 Feed Record 9 

VIII. 24 Labor Record 6 

25 Farm Plot 11 

IX. 16 Journalizing 1 

17 Posting 20** 

X. 18 Trial Balance 1 

19 Balance Sheet 1 

20 Closing the Ledger 20 

XI. 26 Partnership and Joint Stock Co., 

Exercises 1 and 2 

27 Corporations, Exercise 3 

XII. 28 Arrangement of a Business Letter, 

Exercises 4 and 5 129, 131 

30 Addresses and Inclosures, Exercise 7 140 

XIII. 29 The Business Letter, Exercise 6 136 

XIV. 31 Business Forms, Exercises 8 and 9 . . . 141, 142 
32 Negotiable Instruments, Exercises 

10 to 14 

XV. Final Review and Test. 

* Two or three column journal paper. 
** Common ledger paper. 

(161) 



Page 

29 
30 
31 
33 
34 
43 
43 
50 
51 
52 

58 

59 
54 
64 
1C6 
107 
103 
109 

76 
81 
84 
84 



117 
122 



143-147 



PR 7 ^9" 



One copy del. to Oat. Div. 



